topic Re: Won cruise - did not accept prize - still got 1099 in Retirement tax questions

Won cruise - did not accept prize - still got 1099

Taxguy100 — Fri, 31 Jan 2025 21:07:08 GMT

Won $2000 cruise on NBC TV show. Received a 1099-Misc. However, I told them I did not want the cruise and did not accept the prize. Somehow through all the paperwork they have my SSN. How do I show this on my tax return, given that I have to report it because of the IRS' matching program but I did not receive any value? Thanks.

Re: Won cruise - did not accept prize - still got 1099

JohnW152 — Wed, 05 Feb 2025 13:35:57 GMT

As you say, since the prize value was reported on Form 1099-MISC, the IRS will expect to see it as income on your tax return. So you'll need to enter it in TurboTax, then make an adjustment to offset the amount.

To do this in TurboTax Online:

Open TurboTax Online
Select Tax Home in the left pane
Select the dropdown to the right of Wages & Income
Select Pick up where you left off, Review/Edit or the edit pencil
On the Great! We've got your income info page, select the dropdown to the right of Other Common Income -- Tax refunds, 1099-G, 1099-NEC, 1099-MISC, 1099-K
Select Start to the right of Form 1099-MISC
Select Yes on the Did you get a 1099-MISC? page
Enter the information from your 1099-MISC on the Let's enter the income from your 1099-MISC page, then select Continue
On the Describe the reason for this 1099-MISC screen, enter Prize, then select Continue
On the Do one of these uncommon situations apply? screen, select the bullet next to None of these apply, then select Continue
On the Did the Prize involve work that's like [your] main job? page, select the bullet next to No, it didn't involve work like [your] main job, then select Continue
On the How often did [you] get income for Prize? page, answer appropriately, then select Continue
On the Did the Prize involve an intent to earn money? page, select the bullet next to No, it didn't involve an intent to earn money. This indicates to the program that this wasn't self-employment income, so self-employment tax won't be triggered. Select Continue
On the Your 1099-MISC summary page, select Done, unless you have more Forms 1099-MISC to enter

NEXT:

To enter the adjustment in TurboTax Online:

After the above actions, you should be on the Let's get the details on what you told us earlier… screen
Scroll down and select the dropdown to the right of Less Common Income
Select Start or Revisit to the right of Miscellaneous Income, 1099-A, 1099-C
On the Let's Work on Any Miscellaneous Income page, select Start to the right of Other reportable income
On the Any Other Taxable Income? screen, select Yes
On the Other Taxable Income screen enter the description Return of Prize, then the amount, as a negative (i.e., -2,000). Select Continue
On the Other Miscellaneous Income Summary screen, you should see the transaction. Select Done

Make sure that you have some paperwork showing that you returned the prize, in case the IRS asks any questions.

If the TurboTax Online navigation described above doesn't look like what you're experiencing, see the TurboTax Help article Why does the TurboTax navigation menu look different for me?.

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Re: Won cruise - did not accept prize - still got 1099

Taxguy100 — Mon, 17 Feb 2025 17:17:10 GMT

I use TurboTax Premier on the desktop so virtually none of the screens you mention are there. For instance, there is no place to enter a description saying Return of Prize. Where I enter the 1099-Misc, there's a box to click that says Winnings (Prizes, etc.). However, if I prepare another 1099-Misc that is a negative amount to offset my incorrect 1099, and I click on Winnings (Prizes, etc.) again, then my Sch 1 of the 1040 doesn't show the Misc Income at all. That would be OK from a dollar perspective, as the amounts completely offset, except then the IRS would not see that I am reporting the 1099 in the first place, and the matching program will flag it and I'd be in trouble.

I can check "Other Income" on the 1099-Misc and enter a negative amount. My Sch 1 then shows the original $2K prize, and then further down a negative amount without explanation. I would think that could be a flag. Any advice would be appreciated. Thanks.

Re: Won cruise - did not accept prize - still got 1099

Taxguy100 — Mon, 17 Feb 2025 17:23:26 GMT

Ah - I think I found the best way is not to enter another 1099-Misc. Click on Sch 1, Line 8z brings up "Other Income Statement" and there I can enter a description and a negative amount.

Ideally the best thing is to get the 1099 issuer to correct the 1099 in the first place, if they will. That could be a big process.

Re: Won cruise - did not accept prize - still got 1099

DaveF1006 — Thu, 20 Feb 2025 20:21:19 GMT

Yes, this may trigger an IRS inquiry but to negate the income you mention, this is the only way to negate the income in Turbo Tax. Just to be clear, here is how to enter.

Once you entered the 1099 MISC, here is how to negate the income.

log into your account
Select Wages and income
Less Common income
Miscellaneous Income, 1099-A, 1099>start
Scroll to the bottom of the page to Other Reportable Income
Other taxable income, answer yes
Then give a brief description of the income and the amount listed..

Once this appears in a summary screen, click on the Add Miscellaneous Income Item and then describe this as 1099 MISC received for prize that was returned and then record the amount as a negative number. In the description box, you can add as much detail as space permits.

@Taxguy100