This is an old post referring to 2107 and earlier tax returns. For 2019, the entries go on line 8 of Schedule 1, not line 21 of form 1040.
If you received an erroneous 1099-Misc
You have several choices:
1. Ideally, you get a corrected 1099-misc from the payer
2. Don't report it on your return. Attach a copy of the 1099 and a statement explaining the circumstances. You can't e-file. From the IRS instructions for form 1099-Misc: Form 1099-MISC incorrect? If this form is incorrect or has been issued in error, contact the payer. If you cannot get this form corrected, attach an explanation to your tax return and report your income correctly.
3. Report the Income on schedule C and take a deduction, for the same amount, under other expenses
4. Report the income as other income (enter in TurboTax at the 1099-Misc screen) on line 8 of Schedule 1. Then enter a line 8/Schedule 1 deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Enter the number with a minus sign (-) in front. Briefly explain at description.
5. Do nothing and hope you can explain it away when & if the IRS contacts you
