How do I report a 1099 M with y social security number received on behalf of someone else?

[spring530]

I received a 1099 for funds to be used for an airline ticket for another volunteer to go on a tax-deductible charitable mission. I gave funds to the other volunteer who purchases the airline ticket and went on the charitable mission. How do I report this on my form 1040? Can I issue 1099 to the other volunteer and then put a negative 1099 on my return?

[AnnetteB · Accepted solution]

Since the payment to you was reported on Form 1099-MISC and the IRS has a copy of that form, they will expect to see it reported on your tax return.  That does not mean that it should be included as taxable income though. 

You should keep any documentation that you may have regarding the income and what you did with the money such as who you gave it to and for what purpose to provide to the IRS if asked. You don't necessarily need to issue a 1099 to the person who received the money, but you could.  At least you should make them aware that they should include it as income on their own return. 

Reporting this in TurboTax will be a two-step process, first to include the 1099-MISC as income and then to make a negative adjustment to remove it. 

To include the 1099-MISC as a part of your tax return, follow these steps:

• For CD/downloaded TurboTax locate the search box in the upper right corner and type “1099-MISC” then click Find
• The search results will give you an option to “Jump to 1099-MISC"
• Click on the blue “Jump to 1099-MISC” link
• Answer Yes you did receive a 1099-MISC
• Fill in the details from your 1099-MISC then click Continue
• Provide a short description for the reason you received the 1099-MISC then click Continue
• On the next screen titled, “Does one of these uncommon situation apply?” choose the last option, None of these apply and then click Continue
• On the next screen asking if the 1099 involved work like your main job, answer No and click Continue
• On the next screen, check the box that you received the income in 2018 and then click Continue
• Finally, choose “No, it didn’t involve an intent to earn money” and click Continue
• Answer the questions on the next couple of screens to finish the process

Now the income shown on the Form 1099-MISC has been added to your return.  Next, it will be “removed” from the return.

Follow these steps:

• Go to Federal Taxes > Wages & Income and scroll to the bottom of the screen to the Less Common Income section (expand the section by clicking Show More if necessary)
• Click Start or Update beside Miscellaneous Income, 1099-A, 1099-C
• Scroll to the bottom of the list and click Start or Update beside Other Reportable income
• Answer Yes to move forward
• Enter a brief description, such as “mission funds adjustment,” and the amount reported on the 1099-MISC as a negative number then click Continue
• Click Done

When you see your complete tax return Form 1040 and the Schedules, the amount shown on the Form 1099-MISC will be reported twice on Schedule 1 line 21 – once as a positive amount and once as a negative amount.