This is a bug in TurboTax's step-by-step mode where TurboTax is failing to mark the "Spouse" indicator when the Form 1099-NEC is entered under 1099-MISC and Other Common Income and Spouse is selected as the form recipient. Entering under 1099-MISC and Other Common Income also results in TurboTax not associating the Form 1099-NEC with the correct Schedule C (regardless of whether the Form 1099-NEC belongs to Taxpayer or Spouse).
Delete the Form 1099-NEC and reenter it under Business Items -> Business Income and Expenses (Sch C). In addition to associating the Form 1099-NEC with Spouse, entering it here will also result in it being associated with the correct Schedule C.
I have this same issue. I am married filing jointly. Both my wife and I received a 1099-NEC from the same company for different jobs we do for them. I am unable to add a separate 1099-NEC under each business schedule C for both of us. When I go into my wife's business income section and try to add her NEC income, it removes the income from my business. I have gone through and deleted the NEC's but it happens over and over again. The only way I have been able to get both NEC's put in is to add them both to one of the business income sections, which of course is not technically correct. It does change the amount of tax owed/refunded if you put them both in one business over the other. I added a second NEC after putting the first one in within the same business. There is no other way that I can see to do it. I think there is a bug in the Turbo Tax software as the previous user stated.
Thank you all, I do have a report back. This has been determined to not be a bug due to the fact that the 1099-NEC is only for Nonemployee Compensation which goes on the Schedule C. https://www.irs.gov/pub/irs-pdf/i1099msc.pdf
@Katie_B , I'm exactly sure whose reply you are referring to, but your reply indicating that there is no bug is incorrect. What I originally identified above is certainly a bug since indicating that the Form 1099-NEC belongs to Spouse is not being propagated to the underlying 1099-NEC form in TurboTax when the for is entered separately from the business. Perhaps the reply was meant to imply Forms 1099-NEC should only be entered under the business, which further implies that TurboTax should not even be providing the way to enter it elsewhere that it presently does. It's silly to provide a specific section for entering a Form 1099-NEC separately from the business and then tell people that they are doing something wrong if they enter the Form 1099-NEC there; it ends up being another one of TurboTax's gotchas that serves no purpose (I've described several over the years).
If each spouse received a Form 1099-NEC, each spouse's Form 1099-NEC would go on that spouse's Schedule C, not the other spouse's Schedule C. Each Form 1099-NEC must be marked in TurboTax as belonging to either Taxpayer or Spouse so that it ends up on the correct Schedule C.
I'm having this same issue. I have four 1099-NEC forms. One for my husband, 3 for me. I need 3 different business for these. One for my husband for direct sales, one for me for direct sales, and 1 for me for medical transcription for which I received two 1099-NEC forms. The ONLY way I have been able to add all 4 forms is putting them under 1 business, but we have different deductions and expenses for each, so this can't be correct. I've tried deleting all business and adding new, and that won't work either. It's a vicious cycle of adding one 1099-NEC only to find another one has been deleted/zeroed out.
@dmertz I ended up having to go to the form side of TurboTax and manually entered everything on that side, and IT WORKED. Not very convenient, but it does work. It did create the 1099-NEC section for each of our businesses and has everything allocated correctly when I switch back to the step-by-step side. You do need to check whether it is taxpayer or spouse's income and link to correct Schedule C. Hope that helps!
Yes, I also had to switch over to manual and enter the forms separately. THERE IS A BUG: the step by step will ONLY recognize one 1099-NEC payer, i.e. will not create multiple separate 1099-NECs from the same payer to different businesses.
Thanks for the info. Now I understand more about what problems there are.
@Katie_B , entering separate Forms 1099-NEC for both spouses is messed up a lot worse than I originally thought and reported ... see above. The only way to get correct reporting is to do it in forms mode. It cannot be accomplished in step-by-step mode (despite what you were told by Product Quality or Product Development; they are seriously mistaken).
Thanks! I am seeing new information as well, so I am still working on this and will get back with you once I get more solid info.
@dmertz would you mind if I grab this token number from you? I believe I have duplicated this on my end but would like to confirm its the same thing you are seeing.
@Katie_B , this is a problem with entry in step-by-step mode. It cannot be demonstrated with a test file, it must be demonstrated by actually making the entries in TurboTax for the situation where both spouses have separate self-employment businesses and Forms 1099-NEC.
I entered the information manually in the form mode and see it is there (in the form mode) but turbotax did not recalculate the taxes owed and it does not show up in the easy step mode
Entry in forms mode is a bit complicated because it involves not only associating the 1099-NEC form with the correct spouse but it also requires establishing linkage with that spouse's Schedule C (or Schedule F). The Form 1099-NEC income must not be marked as being Other income.
I am having the same issue
I went to forms and manually put in the 1099nec information for the second business and can see the information is saved in (the forms mode) but it did not update over into the (easy step mode) and did not recalculate the taxes due
Entered correctly in forms mode, the result should be correct. Correcting the linkages might not cause the tax liability to change because, under a certain amount, the tax liability will be the same whether earned by separate businesses or all by a single business. Examine each spouse's Schedule C and Schedule SE to confirm correct reporting.
Do not revisit these entries in step-by-step mode once you have made them in forms mode. Revisiting them in step-by-step mode will likely undo the work you did in forms mode.
Thank you
I failed to link it to the schedule c
looks like it worked now
I too am having the same issue where my spouse has a 1099-NEC and I go through all the step-by-step and seems to work. But when I go to finalize my federal taxes I get flagged for missing info in the schedule c. It brings me back to "review" and yet there is nothing there to fix. I go through the same thing again and get flagged again for the same thing. I have tried to delete the 1099-NEC and start over and still get same results. I do not see anywhere where I can switch to form mode so I can manually address this. I am using the Self-Employed version of Turbotax and see others mentioning doing it manually but I don't see that feature anywhere. Any ideas as I am getting so frustrated I may use a different service if I can't get this resolved.
Wrong- it's definitely a bug. I've used turbotax for over 10 years for several businesses, and this is definitely one of the worst problems i've ever seen.
Nobody here said that there aren't substantial bugs with regard to the entry of Forms 1099-NEC. However, although it's not easy, those using the CD/download version can work around those bugs by making certain entries in forms mode.
Hello all, I am checking in with you to let you know we are still working on this. There is a 1099-NEC update coming out in the next version to be released that very well may resolve this, so please do continue to keep me posted on what you are experiencing. Thank you all!