@taxesconfuseme wrote:
Hi, first of all, thank you so much for your help here. I don't know what I'd do without internet strangers like you!
I also received a 1099-NEC. Are you saying that instead of choosing 1099-NEC, I should instead fill out the boxes for a Schedule 1 (1040) like I received a 1099-MISC instead? Then, I wait for the letter from the IRS and write them back telling them it's not an ongoing thing. When I choose the 1099-NEC, it forces the self-employment (15%) tax, and of course I don't want to pay this if I'm not supposed to.
In Turbotax Online 2020 version, the workflow for 1099s is somewhat different. If you enter the income as a 1099-NEC, and don't check any of the boxes on the follow-up page (in particular, don't check the box for "I have expenses to deduct") then Turbotax will not create a schedule C, and it will place the income for you on line 8 of schedule 1 as Other Income.
I don't know if the desktop interview is different, I think it is the same, though. Don't enter it as business income, and I think if you just enter it as a plain 1099-NEC and don't check the box to deduct expenses, it should place the income on schedule 1.
If you are getting a schedule C and SE tax, then either you tried to deduct expenses, or the programmers have changed the workflow since yesterday. You can't deduct expenses from "other income"--that deduction was eliminated in the tax reform law. In past versions of the program, you could get a 1099-MISC with self-employment income to be treated as other income by answering the test questions as no -- not like your main job, not done for profit, did not do in past years and not planning to do in the future.
(Be aware that if you make egg donation a regular activity, it will be considered self-employment by the IRS. Regularity and profit motive are two of the important factors in separating self-employment income from hobby or occasional income.)
You can't manually put the income there in Turbotax online because you can't directly access the forms, and you should not make direct entries on the forms in the desktop version if you can avoid it because making direct entries may void the accuracy guarantee and may prevent e-filing.
The IRS will send a letter presuming that you reported "self-employment" income inaccurately, so expect that you will need to send back proof of the circumstances.
