How to offset apartment displacement income from film production company

[Bodacious]

Help!

I received a 1099-NEC for $4,000 from a production company who contracted with my landlord to film a movie in our building for one month. Because of this I was forced to relocate from my apartment for the 30 days and secure a long term stay hotel for $2,800.

I've discovered that the $4,000 should have been on a 1099-MISC because TT is calling the amount nonemployee compensation and classifying it as business income which it is not. I contacted the production company and they refuse to change the 1099. Can I ignore putting it in as a 1099-NEC and enter the income as Misc Income?

Also, I am getting taxed heavily on the income even though I had to pay out $2,800 to relocate to the hotel through no fault of my own. Where do I deduct this amount as an expense or an above the line income deduction to lower the income? Does it matter that my current rent was suspended for that month I was relocated and I didn't have to pay it?

Thanks!

[DavidD66]

You need to report the 1099-NEC as self-employment income.  By reporting it on Schedule C, you can deduct the cost of your hotel and any other expenses you incurred as a result of having to vacate your apartment.  If you claim it as Miscellaneous income (which isn't correct and might be questioned by IRS) you won't be able to deduct your expenses.  You will be better off reporting on Schedule C.  And no, it doesn't matter that your rent was suspended.

[Bodacious]

Thank you for your reply, David! I initially put it in as self employment income as you stated and then got hit with a 20% self employment tax. How do I avoid this then?

[ColeenD3]

You don't. You must pay 15.3% SE tax on this income.