1099 NEC

[rolir12]

I received a 1099-NEC from my employer for mileage reimbursements. When I run the error check, Turbo Tax keeps prompting me fill out schedule C with information I don't have, i.e. Principle Business Code, Business Name, Accounting Method, Material Participation Boxes, etc. I'm not self-employed and I don't have my own business. I'm not sure how to proceed. Any suggestions?

[RBBrittain]

The 1099-NEC (Non-Employee Compensation) is self-employment income and should be claimed on Schedule C (or if no business expenses, on Schedule C-EZ).

If you also receive a W-2 from this employer, your mileage reimbursements (to the extent reportable) should have been incorporated into your W-2.

[DaveF1006 · Accepted solution]

Let me point you to a different direction so that Turbo Tax will not require you to fill out a Schedule C but you will need to report this as wages and you will need to pay your uncollected social security and Medicare taxes as part of this reimbursement.

1. Log into Turbo Tax
2. Wages and Income
3. Other Common Income

4. Form 1099-NEC>start

5. First question say yes. if it asks to upgrade, pick deluxe for now if you are not there already. if you are in a premier version, this is fine.

6. now enter your 1099 NEC information

7. Next screen will ask the reason, put in mileage reimbursement

8. Next screen says does one of these uncommon situations apply? Here select My employer reported this extra money on a 1099-NEC but it should have been reported on a W-2.

9. Next screen regarding 8919,select I received a Form W-2 and this Form 1099-NEC, but all the income reported on this Form 1099-NEC should have been included on my Form W-2 from XXX.

10. The next couple of screens will tell you that this will be reported as wages but your return will contain a form 8919 that will report your uncollected taxes and Medicare taxes in your return.  This will keep you from having to report this as a separate business in a Schedule C. 

[mlakg]

I am an occasional consultant and received a 1099-NEC.  I do not have a business.  Why does it take me to Schedule C?  Isn't this just income?

[VolvoGirl]

Sorry that is self employment income.  When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.  YOU yourself are the business.  

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You can enter Self Employment Income into Online Deluxe or Premier but if you have any expenses you will have to upgrade to the Self Employed version. Or any of the Desktop programs. But you will get the most help in the Home & Business version.

Turbo Tax Self Employment info
https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...

How to enter income from Self Employment
https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

[mrstspoon]

Did DoorDash Inc.  Didn't know how to fill out the Schedule C.  Have a Turbotax Premier

[VolvoGirl]

@mrstspoon  Did my answer above help get you started?  Are you stuck?  Do you have specific questions?

You can enter Self Employment Income into Online Deluxe or Premier but if you have any expenses you will have to upgrade to the Self Employed version or use any of the Desktop CD/Download programs.

How to enter self employment income

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

You will need to keep good records.  You may get a 1099NEC at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small and if you don't get the 1099NEC.

You use your own records.  You are considered self employed and have to fill out a schedule C for business income.   You use your own name, address and ssn or business name and EIN if you have one.   You should say you use the Cash Accounting Method and all income is At Risk.   

After it asks if you received any 1099Misc or 1099NEC it will ask if you had any income not reported on a 1099Misc. You should be keeping your own records.  Just go through the interview and answer the questions.   Then you will enter your expenses.

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  

The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 Schedule 2 line 4 which goes to 1040 line 23.  The SE tax is in addition to your regular income tax on the net profit.

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf

[Barcinelli]

If I get a 1099-NEC for working at a charity that pays me, can I deduct the milage to/from that location?

[DaveF1006]

No, because driving to the charity and then coming back home is considered commuting.  However, if you perform driving chores or run errands for the charity, you can deduct those miles between the time you are at work and before driving home at night.

[dmp59979]

I received a form 1099-NEC which was for employer reimbursed relocation expenses. The costs were a pass thru from the moving expenses that I incurred. Is there a way to deduct/credit the moving expenses so it does not show as income? Or what is the proper way to handle this situation. 

[ZoltanB45]

This is a tricky one since he issued a 1099-NEC. This generally goes in box 12 of the W-2.

One can construe that it was not a reimbursed moving expense but rather a job that you had to perform (moving) and he paid you accordingly. If you want it to be perceived as such, you would list it as business income and write off the expenses he reimbursed.

[MBullDog]

I also received a 1099-NEC for mileage reimbursement.  I'm trying to go this route, but I did not receive a W-2 from them.  I do not consider myself as self employed.  I received W-2's from other employers. How do I reconcile this income? Thanks.

[ColeenD3]

You said, "I received W-2's from other employers." What happened with other employers does not affect the person who issued you a 1099. Do you get a W-2 from him? What was the reimbursement for, if you did not work for him.

If you worked for this particular person/company and they did not issue you a W-2, then you are self-employed for this income.

[Teresa Nham]

Please advise what should I do to correct prior years 1099-NEC duplicated reporting? I have reported the same amount on both Sch. C (business) and Sch.1 (Other income).

Thanks!

[LenaH]

If you reported duplicate income in 2020, then you will need to amend your return. To do so, please follow the instructions here. 

Then, you will need to determine if you are self-employed and the income should be on a Schedule C or if the income was sporadic or from a hobby and the income should be reported as Other Income. Please review this IRS fact sheet to help you evaluate your situation: Business or Hobby?

For tax purposes, self-employment income includes any part-time businesses or "side work" performed in which you are in business for yourself, rather than another person. You are also considered self-employed if you engage in business-like activities where you intend to make a profit. The IRS has guidelines for what is a business and what is considered a hobby. In addition, any losses incurred each year will be treated differently depending on what this income is classified as. If an activity is a hobby, losses from that activity may not be used to offset your other income. 

To delete one of your 1099-NEC's, please follow the instructions below:

1. Open your return.
2. Search 1099-NEC with the magnifying glass tool on the top of the page.
3. Go to the Jump to 1099-NEC link in the search results. 
4. Use the trash can tool to delete one of your 1099-NEC's on the 1099-NEC Summary page.

For the remaining 1099-NEC, please follow the instructions below:

1. Click Edit next to your 1099-NEC.
2. Continue past the information entered.
3. For the screen Does one of these uncommon situations apply? answer This is not money earned as an employee or self-employed individual, it is from a sporadic activity or hobby (this is not common) if your income should flow to Other Income or answer None of these apply to me if you have determined this to be self-employment income. 

If you determine your 1099-NEC to be sporadic/hobby income and not be self-employment income, then please delete the Schedule C. 

To delete your Schedule C, please follow the instructions below:

1. Open your return.
2. Search schedule c with the magnifying glass tool on the top of the page.
3. Go to the Jump to schedule c link in the search results. 
4. Use the trash can tool to delete your Schedule C. 
5. Click on Tax Tools.
6. Click on Tools.
7. Click on Delete a Form.
8. Scroll down and click Delete next to your Schedule C. 

@Teresa Nham