topic Re: 1099-MISC in Get your taxes done using TurboTax

1099-MISC

odnana1103 — Wed, 05 Feb 2020 21:04:33 GMT

I received a 1099-misc for dividends received. When I enter it, its asking about my business, I have no business.

Re: 1099-MISC

JohnW222 — Wed, 05 Feb 2020 22:24:15 GMT

Dividends aren't typically reported on Form 1099-MISC, but on Form 1099-DIV, that's why the program thinks it's income received by your small business. What box is the income reported in?

Re: 1099-MISC

odnana1103 — Wed, 05 Feb 2020 22:35:38 GMT

box 3, other income

Re: 1099-MISC

JohnW222 — Wed, 05 Feb 2020 22:51:44 GMT

You should request that the payer of these dividends issue a corrected 1099-MISC showing zero income, and issue you a Form 1099-DIV that reports this income.

There's a presumption, although it's not always true, that 1099-MISC income represents self-employment income, subject to self-employment tax (see the TurboTax Help article "Does a 1099-MISC mean I'm self-employed?"). That's why it's important to have your income reported on a 1099-DIV, especially if the amount is over $400 (that's when the self-employment tax kicks in).

That said… if the payer refuses to issue a corrected 1099-MISC for zero, and issue you a 1099-DIV, please see IreneS' guidance; this is for a different type of income, and for 2018, but the guidance is still valid.

Re: 1099-MISC

odnana1103 — Thu, 06 Feb 2020 20:37:15 GMT

I tried following Irene S guidance but it is asking for a Principle Business Code for schedule C

Re: 1099-MISC

SusanY1 — Thu, 06 Feb 2020 20:46:47 GMT

If you're not sure about a business code, you can use the code for "all other", which is 999999 (a series of six 9s). However, I'm not sure that this entirely addresses the question or issue that you're still having with this 1099. Have you been able to get it to also treat your income the way you feel that it should?

Re: 1099-MISC

odnana1103 — Thu, 06 Feb 2020 20:53:27 GMT

No I haven't. When I talked to Vanguard they said its because its considered a substitution payment instead of dividend, its a REIT.

Re: 1099-MISC

KrisD15 — Sun, 09 Feb 2020 01:26:59 GMT

Yes, the Qualified Business Income deduction includes qualified Real Estate Investment Trust dividends.

IRS link to QBI and REIT

Re: 1099-MISC

odnana1103 — Sun, 09 Feb 2020 19:58:59 GMT

Can I use Turbo Tax Deluxe or do I need a different one?

Re: 1099-MISC

DeanM15 — Sun, 09 Feb 2020 20:11:12 GMT

You can enter a 1099-MISC with the box 7, non-employee compensation, filled in with Deluxe. However, you can not take expenses for your self employed work.

If you need to add expenses against the income on your 1099MISC box 7 entry, you must use TurboTax Self-Employed.

Re: 1099-MISC

odnana1103 — Mon, 10 Feb 2020 19:05:09 GMT

I dont have expenses because I’m not a business, it’s just so confusing.

Re: 1099-MISC

DeanM15 — Mon, 10 Feb 2020 19:13:57 GMT

I would run through the entry questions for the 1099MISC again.

When you run through the questions, you will come to a question about whether you intended to make money. If you did intend to make money, then it will tax your money as a business and apply the Self-Employment Tax. You can then deduct your expenses if you have any. If you did not intend to make money, then the program will just add the income as ordinary income with no Self Employment Tax.