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Get your taxes done using TurboTax
You would enter your 1099-NEC and let it flow to Other Income and you would enter your 1099-MISC, which will also flow to Other Income. Then, you will also make a manual entry in Other Income to deduct the amount of your 1099-NEC form with the description - "Income reported on 1099-MISC". The net of all of these entries will be the amount of your 1099-MISC (the amount the lawyer sent you).
First - please follow the steps below to enter your 1099-NEC:
- Open your return.
- Search for 1099-NEC with the magnifying glass tool at the top of the page.
- Click on the Jump to 1099-NEC link at the top of the search results.
- Click Add a 1099-NEC.
- Enter the information as shown on your form.
- On the page titled Guess what? You can deduct expenses for the example work choose No, I don't have expenses related to this income.
Next - please follow the steps below to enter your 1099-MISC:
- Search for 1099-misc and select the Jump-to link.
- Edit your 1099-MISC.
- Continue past the amounts already entered.
- Describe the reason for this 1099-MISC.
- Answer This Money Was From a Lawsuit Settlement on the screen Does one of these uncommon situations apply?
- Answer No, it was not back wages for the next question.
- Answer No for the question Did you have another 1099-MISC?
- Your 1099-MISC will flow to Other Income.
Last - please follow the steps below to deduct the amount of your 1099-NEC:
- Click on Federal on the left hand side.
- Scroll down to Less Common Income.
- Click Start next to Miscellaneous Income.
- Click Start next to Other reportable income.
- Answer Yes to Any Other Taxable Income?
- List description as "Income reported on 1099-MISC"
- Enter the amount as a negative.
To confirm that only one amount is reflected on your tax return, please follow these steps to see your federal forms:
- Open your return.
- Click on Tax Tools on the left hand side.
- Click on Tools.
- Click on View Tax Summary.
- Click on Preview my 1040 on the left hand side.
- Search for Schedule 1 - Additional Income & Adjustments to Income.
- The amount in Other Income should be the amount of the 1099-MISC.
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March 17, 2021
12:27 PM