@mckeem1 wrote:
For the option 2 - I saw this in another post that you would enter it as Other Income and then somehow deduct it in a different section of TurboTax. But it seems that would not get the full amount of the deduction.
So I think that I am going to be sending in my taxes, which scares the crap out of me. On our 990 forms we have filed, the IRS has lost the paper copies 2 times in the last two years, so I have little faith they won't do the same when I file personal taxes.
There is no option #2, not as you describe.
If you also have a schedule C business, and you received money meant for the 990 non-profit, you could report the money as business income and then report it as a business expense on your schedule C and issue a 1099 to the non-profit. That would not be correct either, but would probably satisfy the IRS computers. That might be what you are suggesting as #2.
If you pick #1, then you can e-file, and send a written explanation when requested. #3 will also allow you to e-file, but could end up with a request for the same written explanation. #3 seems to be the "standard answer" of many experts on this forum including most Turbotax Pros (when they are here, which is usually only "in season"). I do prefer my own answer of paper filing because it is the most correct, but I probably wouldn't do it this year if I was expecting a refund, because I'd never know when I would get it.
