topic Bonus for 1099-Misc Principle business code in Get your taxes done using TurboTax

Bonus for 1099-Misc Principle business code

MisterM70 — Sun, 09 Mar 2025 16:22:38 GMT

I received a 1099-Misc for a year end bonus. Turbo Tax online has me completing a schedule C for self employed income. Is this correct and what is the principle business activity code?

Re: Bonus for 1099-Misc Principle business code

MindyB — Sun, 09 Mar 2025 17:11:19 GMT

A year-end bonus from your employer should not have been reported on a 1099, and you should not create a business.

Instead of utilizing the 1099-MISC input and creating a business, follow these steps in TurboTax Online:

Navigate to Federal > Wages & Income > Less Common Income > Miscellaneous Income, 1099-A, 1099-C > Start or Revisit
On the next screen select Start or Revisit Other income not already reported on a Form W-2 or Form 1099
The next page asks Did you receive any other wages?, choose Yes and Continue
Continue through the interview until you arrive at the screen Any Other Earned Income? Choose Yes and select Continue
Now, Enter source of other earned income, Employee compensation that was not reported on a W-2 and continue, ignoring note that says not to enter payments for which you will receive a 1099.
Continue through the interview, at Report Your Wage Income, report the amount from the 1099-MISC, and use the information from W-2 for employer's name and EIN. Check the box "I received a Form 1099-MISC for this income." Select Code H - I received a Form W-2 and a separate Form 1099-MISC

Re: Bonus for 1099-Misc Principle business code

MisterM70 — Mon, 10 Mar 2025 01:11:31 GMT

I have followed your instructions and appreciate the prompt reply.

I have a question regarding the final step, entering the employer information from my W-2. The W2 and the 1099-Misc have different Employers listed and EIN's. My W2 shows Trinet (our benefits/payroll company) as the employer and the 1099-Misc shows the actual company I work for. Do I enter the EIN information from the w-2 or 1099-Misc?

Re: Bonus for 1099-Misc Principle business code

MindyB — Wed, 12 Mar 2025 13:44:59 GMT

In that case, enter the EIN from the 1099. When the IRS sees a 1099 and W-2 from the same employer in the same year, it is clear that there may be an error.

Now that the EINs do not match, you may be questioned from the IRS if the 1099 really should have been wages. It should have been. You will be able to easily explain the situation, with a letter in response if they reach out to you.