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Get your taxes done using TurboTax
Please see Tax Expert TomK's advice here/below:
There will be a few steps to follow to report your stipend correctly because of the form 1099-MISC. First, you would have to report 1099-MISC and make adjustments for the IRS matching purposes. Then, you would report the stipend correctly using steps below.
REPORT 1099-MISC
IF box 3 reports your stipend, report the form as follows:
- Open (continue) your return if it's not already open.
- In the Search box (top right-hand corner), type “1099-misc’
- Click on the Magnifying Glass icon.
- Click on “Jump to 1099-misc” link highlighted in Blue.
- Answer the Step-by-step instructions.
And then make an adjustment using the steps below:
- Federal taxes
- Wages and Income
- Scroll down to Less Common Income
- Select Miscellaneous Income.
- Select “Other reportable income”, click ‘Yes’ and you will be prompted to enter Description and amount. Please be sure to write a short explanation and enter the amount as a negative number. At this point, the form 1040 will show full amount as taxable AND as a negative adjustment on line 21. The end result: form is reported but not taxable.
If box 7 reports the stipend, you would have to report it as self-employed income, then enter the same amount as your "business" expense. This will ensure that form 1099-MISC is reported for matching purposes, but the amount is not taxable as self-employment income.
Go to:
1. Federal Taxes
2. Wages and Income
3. Self-Employment, Select Income and Expenses - follow the interview questions; you would report the stipend as if you own a business; once general questions are answered, you would enter the stipend as an expense (you can create your own description). The end result: form 1099-MISC is reported, but the income is not self-employment income--because it shouldn’t be.
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