The expenses reported on Form 1099-MISC along with your
royalty income can be deducted on Schedule E.
Use the following steps to enter your royalty income and
expenses in TurboTax:
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On the top row of the
TurboTax online screen, click on Search (or for CD/downloaded TurboTax
locate the search box in the upper right corner)
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This opens a box where you
can type in “royalties” (be sure to enter exactly as shown here) and
click the magnifying glass (or for CD/downloaded TurboTax, click Find)
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The search results will
give you an option to “Jump to royalties”
-
Click on the blue “Jump
to royalties” link
Skip the first question or so because they will pertain to rental
properties and not royalties. You will
come to a screen titled, “Is This a
Rental Property or Royalty?” where you can choose Royalty. You will need to
enter a short description for the type of royalty and include an address for
the royalty. Use your own address if the
royalty is not associated with an actual property address (such as with a
property lease or mineral rights).
Continue moving forward until you get to a summary page for the
royalty. Here you can select Start or Update beside Royalty Income
to enter the income amount and the other information on the 1099-MISC.
After all the details from your 1099-MISC have been entered,
you will return to the main screen for that royalty. Click Start
or Update beside Expenses and click through the screens
until you come to one titled Any
Miscellaneous Expenses. On this
screen you can enter a description and amount for the expense items reported to
you.
