If the income is not taxable, you would need to enter it as you normally would based on how it is reported on the 1099-NEC form and then enter a negative amount to Other Income to cancel out the income.
This is so that the IRS will be able to match their copy of the 1099 form to an entry on your tax return. The IRS will assume the income is taxable based on how it is reported on the 1099 form, so that is why you have to report it properly on your tax return.
You can use the following menu tabs in TurboTax to report the negative adjustment to income:
- Federal
- Income and expenses
- Less common income
- Miscellaneous income
- Other reportable income
Enter a description for the entry (IRS code abbreviation) and the amount as a negative number.
It is recommended that you mail your return in and include a memo as to why you adjusted the income. If the IRS determines that you are wrong, the memo may protect you from penalties for underpayment of tax. It may also prevent the IRS from holding up the processing of your tax return.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
