It is possible to enter Form 1099-K and then adjust it. But, this should be done in two steps, not one, depending on what type of income is being reported on Form 1099-K.
- If your Form 1099-K income is not from a trade or business, enter Form 1099-K as Less Common Income. Enter the offsetting amount as negative income. To do this in TurboTax, follow these steps:
- From the left menu, go to Federal and select the first tab, Wages & Income.
- Add more income by scrolling down to the last option, Less Common Income, and Show more.
- Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start.
- Choose the last option, Other reportable income and Start and Yes.
- .Enter the applicable description and amount and Continue
- First, enter Form 1099-K as received. It is essential that the full amount be entered.
- For a description, include Form 1099-K and Personal Property Sales if this is coming from personal items sold similar to selling items at a garage sale.
- Next, enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income.
- For the cost description, include Form 1099-K and Cost of Personal Property
- In other words, if the goods cost you $100, but Form 1099-K was for $10 in sales, the maximum cost allowable would be $10.
- If your Form 1099-K income is from an intent to earn money from a trade or business, enter Form 1099-K in the Income section of your Self-employed income & expenses. Report the cost of those sales as an other miscellaneous expense for your business.
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