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

1099 MISC

rickh1051 — Thu, 04 Feb 2021 21:29:55 GMT

I received a 1099 MISC for the cost of a legal services benefit. It's not really income received but the yearly cost of what I didn't have to pay. After inputting the information into TurboTax, I'm now getting all kinds of errors asking to fill in information for schedule C. This is not income to me as it's not really for a business. How do I answer the questions regarding schedule C.

Re: 1099 MISC

MinhT1 — Thu, 04 Feb 2021 21:43:44 GMT

If you receive a form 1099-NEC or 1099-MISC for a legal service plan, then you are not considered as self-employed and do not need to file a Schedule C.

In TurboTax, enter your form 1099-NEC and follow the interview until you arrive at the page titled Did this involve an intent to earn money?. Answer that this did not involve an intent to earn money. The amount will be reported as Miscellaneous income and will not be subject to Self-employment tax.

In TurboTax, there is a work-around. Although you may receive this income every year, say that you only receive the 1099-NEC only in 2020, not in previous years and not in 2021, you will then have the screen where you can say that it did not involve an intent to earn money.

Re: 1099 MISC

rickh105 — Mon, 08 Feb 2021 10:22:36 GMT

Thank you for the reply. The answer was just what I needed.