10099 - MISC

[rmcleod40]

I received a 1099 MISC for $25 in box 7 (Non-Employee Compensation). It is for UAW legal service benefit. The tax program puts it in Schedule C. How do I get it to list it as 1099-MISC income?

[Bsch4477]

Sch C is where the IRS will look for it. If your self employment income is less than $400 you won’t pay self employment tax so it will be treated like any other income. 

[rmcleod40]

That's just it, it isn't self employment. It is a union negotiated benefit from my job.

[Bsch4477]

Assuming it is taxable it will just be taxed at your usual tax rate. 

[rmcleod40]

It has never gone on a Schedule C. It keeps listing it as business income. IT IS NOT BUSINESS INCOME. I do not now, nor have I ever had a business, It is a union negotiated benefit, that get treated as income.

[Bsch4477]

I completely understand.  But with an amount in box 7 of your 1099-misc the IRS computer will look for a Sch C in your return.  The only disadvantage of having to report it there is that self employment income is subject to self employment tax. But in your case, because the amount is so low, you will not have to pay that. So the end result is that you satisfy the IRS and there is no disadvantage to you tax-wise. 

Having written that, you could enter the amount in box 3 and it will be treated as “other income “ and explain to the IRS why you did that if they contact you. 

[rmcleod40]

So, basically, there's a glitch in the program that won't report the item properly. Its a non-cash assessment for the value of my legal services benefit, but the program wants to treat it as cash self employment income. And the best solution I can get is to either a) ignore because its so small I won't get taxed or b) put it somewhere else it doesn't belong & explain it to the IRS if they come calling. Thanks for nothing...

[ColeenD3]

It's not a program glitch, this is how it is prescribed by the IRS. If you have an amount in Box 7 of Form 1099-Misc, they will look for on a Schedule C. Period. There is no little space on a tax return to explain, yes but...

If you choose not to put it on Schedule C, you can put it in other income. Again, the IRS will look to see it entered on Schedule C. Then, when they send you a letter, you can explain.

[rmcleod40]

I was going to continue this, but why waste my time...every year this has happened, and every year there are particular steps to make it go in the proper place (search 1099 MISC if you don't believe me). However, you are clueless (IMO) and convinced you're right & nothing I can say will change that. So, after all these years TurboTax is losing me as a customer. I will take my taxes to a professional preparer who knows what they're doing, then fire off a letter of complaint to Intuit. Have a nice day...