1099-NEC - Oil wells Working Interest

Forum|Forum|1 year ago
February 8, 2025
1 reply
20 views

How do I enter my1099-NEC. Money from Working Interest in west Texas oil wells. Box 1 is more than checks received. If I subtract 3 of 4 numbers on the reverse of the 1099-NEC Then it equals the amount of the checks received. How do I enter The 4 numbers on back side of the 1099? The numbers to subtract are not listed with box numbers but instead under columns with labels of "Deductions WI", "SevTax WI", and "Net WI". There are amounts on two different lines. One line shows "State Account = ME/JIB Rev Net" The second line shows "Taxable Location = TX/410747868

I have Turbo Tax "Home and Business".

TurboTax Home & Biz Windows

MarilynG

Level 15

Per Expert @DianeW777:

"It depends whether it is a working interest or royalties when determining the correct way to report the income.

If you are an independent contractor or self-employed in a business related to a working interest in the oil or gas, you must report the royalty income on Schedule C instead of Schedule E and generally will be subject to self-employment tax. If your royalty is a working interest, the income is listed in Box 1, Form 1099-NEC.

Expenses are allowed on either form (Schedule C or Schedule E)."

It appears that your 1099-NEC is for a working interest, with an amount in Box 1. Report this as Self Employment Income, and enter expenses against the income, on Schedule C.

However, if you believe it is a Royalty Payment, enter your 1099-NEC as it it were a 1099-Misc, with the amount in Box 2. This reports the income on Schedule E as Rent/Royalties.

Here's more info on Reporting 1099-NEC as Royalty Income.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"