Turbo tax is forcing me to use schedule C for 1099-Misc income. It's a pension. How do I get around this? Do I have to manually edit the return? Last year's fix fails.

[scilipoj]

Along with last year's solution I tried a number of suggestions from the community.  None of them work.  I think this year's prompting is different enough from last year's that the step by step suggestions no longer apply.  I can't just report the income as "other" income because I need to include the 1099-misc since there was withholding.  Can I brute force delete schedule C and manually edit my return to report the income as other income as it was reported last year?

[Carl]

If it's really a payment from a pension, then the payer is using the wrong form to report it. Not your problem though, as they IRS will fine them (not you) for this.

Reporting 1099-MISC (box 3 or box 7) that is not self-employment income

Under the Wages & Income tab (or Personal Income tab) scroll down to Other Common Income and elect to start/update Income from form 1099-MISC. Then click YES to indicate you have a 1099-MISC.

Enter the 1099-MISC exactly as printed, and then Continue.

Enter the reason you got this money – be it scholarship, bonus, streaking butt naked across the 50 yard line of the super bowl, whatever. Then continue.

Select None of these apply, then Continue.

Select No, it didn’t involve work….. and Continue.

Select ONLY the tax year for which this specific 1099-MISC was issued. Do not select the year that you received the 1099. Select the year for which the 1099-MISC was issued. Select no other year. Then Continue.

Select No, it didn’t involve an intent to earn money, then Continue.

Select NO, then Continue.

Click the DONE button, and that does it.

[adrienne-griffin]

Thank you very much.  The union my father was in pays him a pension and they always send 1099-MISC instead of 1099-R.  They also refuse to withhold any federal taxes.  So I need to use this hack every year.

[scilipoj]

I manually edited the returns.  I'm obviously not the only person with this problem.  TurboTax might consider making this easier to fix.

[Carl]

"  TurboTax might consider making this easier to fix. "
Actually, it's the payor of the pension that needs to fix things on their end. I'm surprised that if this happens every year, that the IRS hasn't at least investigated the pension payer and fined them for issuing incorrect reporting documents. I'm sure your dad isn't the only one.

[Winlife]

This was a problem of mine as well. I discovered how to fix it. Fill in the 1099-Misc form and put "Other Income" and then on the next step do NOT say that you received it last year or the year before that or plan on getting it next year. Only put the current year.  If you put other years a Schedule C is generated and then there is no fix without working directly on the 1040. Be sure to give a reason for the income (Non-employee compensation and why).

[JTKM2020]

Same issue. The fix described does not work. Mom gets a bonus from the Government of Guam that they put on a 1099-MISC rather than include on the 1099-R they also provide. Turbo Tax keeps trying to make me complete a schedule c. I ought to be able to opt out of its “fixes.”  

[DianeW777]

This income can be entered without directly entering the Form 1099-MISC.  It's not clear why your Mom would get a Form 1099-MISC when it's from the employer.  It should be included on her W-2.  For this reason she needs to pay her share of the social security and medicare taxes on Form 8919. The IRS will go about getting the employer share.  According to the IRS Employer Publication for Guam, it should have been included in the W-2 (see page 10).

Follow the steps below to enter the 1099-MISC bonus income in TurboTax.

The bonus will be included in the total wages on Form 1040 line 1. On the dotted line to the left of the amount on line 1 there will be a notation "F8919" and the amount. Form 8919 will be included in the return, with reason code H in column (c). Form 8919 will calculate the social security and medicare taxes that your employer should have withheld from the bonus. The total of these taxes will appear on Schedule 2, line 5,  and will be included in your total tax liability.

1. Click the Federal Taxes tab. (In TurboTax Self-Employed or Home & Business click the Personal Tab.)
2. Click Wages & Income. (In TurboTax Self-Employed or Home & Business click Personal Income.)
3. Scroll all the way down to the last section "Less Common Income." Click the Start button for the last topic, "Miscellaneous Income, 1099-A, 1099-C."
4. On the next screen click the Start button for "Other income not already reported on a Form W-2 or Form 1099."
5. The next screen asks "Did you receive any other wages?" Select Yes and click Continue.
6. The next two screens ask about household employee wages and sick or disability pay. Click Continue on these two screens without entering anything.
7. The next screen asks "Did you earn any other wages? Select Yes and click Continue.
8. The next screen asks the source of the other earned income. Select "Employee compensation that was not reported on a W-2." Ignore the note that says not to enter compensation for which you will receive a 1099. Click Continue.
9. On the next screen, "Employee Compensation Not Reported on a W-2," click Continue.
10. If you are filing a joint return, you will get a screen asking which one of you the income is for. Select your name and click Continue.
11. On the next screen, "Report Your Wage Income," enter the employer's name and EIN from your W-2. When entering the EIN, you must enter the hyphen after the first two digits. For Total Wages Received, enter the amount on the 1099-MISC. Select Reason Code H. Click Continue.
12. On the next screen, "Report as Wages," click Done.
13. This returns you to the Miscellaneous Income screen. Click Continue.

[JTKM2020]

Thank you. Helpful.  As my mom is 83 she gets 1099-Rs rather than W-2s.  I assume the analysis is the same?

[npierson7]

Yes, your mother is not suppose to receive W-2, unless she's still working.  Form 1099-R is correct form for distributions from pension plans. 

[KCAV888]

I made a few mistakes entering 1099misc income (mostly in the description of what the income was for), and found the system was generating a schedule c.  So I searched it, followed the directions related to this post in order to create an accurate entry (don't check off any other year but current tax year-VERY IMPORTANT). Then I saw that turbo tax was still generating a schedule c for me...and then upon federal review/smart check it was still finding errors. So, I went into forms at the top right of my screen and manually deleted each schedule c that had been created based on my erroneous entries..it WORKED!!