TurboTax is calculating self-employment tax and income tax on the total amount of the 1099-NEC entered. The amount from your 1099-NEC is being taxed at your marginal income tax rate plus 15.3% for self employment taxes. As you enter expenses to offset that income, the amount of tax will go down. You will need to upgrade to Self-employed version of TurboTax to enter expenses to offset the 1099-NEC self-employment income. If the 1099-NEC is not self employment income, then it should be entered as Miscellaneous income.
Beginning with the 2020 tax year, the IRS will require business taxpayers to report nonemployee compensation on the new Form 1099-NEC instead of on Form 1099-MISC. Businesses will need to use this form if they made payments totaling $600 or more to a nonemployee, such as an independent contractor. This was done to help clarify the separate filing deadlines on Form 1099-MISC and the new 1099-NEC form will be used starting with the 2020 tax year.
