1040 Schedule 1 not appearing (for 1099-K income)

[wa1fhy]

TT Windows desktop 2024 edition.  I have some personal item eBay sales (1099-K expected) all at a loss.  I entered the amount and type correctly in the interview.  The IRS instructions say for personal sales at a loss, the amount should appear at the very top of Schedule 1.  

When I look at the forms included in my return, Schedule 1 does not appear in the list.  If I search for forms and bring up Schedule 1, the 1099-K amount is at the top as it should be.  Yet it doesn't appear that TT will include it in my return.  

I was forced to use Form 8949 and Schedule D (along with the "L" correction codes on 8949 in order to get the personal losses all to equal zero) so at least the IRS will see my 1099-K amount somewhere in my return.

But what's the deal with Schedule 1?

[DawnC]

If all of the income on the 1099-K was from losses on personal sale items, you should not need the 8949.   If you choose Personal Item Sales as the reason for the 1099-K and enter the same amount in both boxes (1a and Amount that shouldn't be included), no further reporting is necessary.   The amount goes to the information box on Schedule 1, but is not included as an income or loss amount on your actual tax return.   If there is no other data on Schedule 1, it won't be a part of your electronic filing, however, the reporting of the 1099-K is part of your tax file.   

Keep detailed records in case of an inquiry by saving a full copy of your tax return that includes all worksheets.   The erroneous amounts are reported on the Other Income Statement and 1099-K Summary page as well as the 1099-K worksheet.  

[wa1fhy]

Thanks for the clarification.  I was concerned that the IRS would receive a copy of the 1099-K and then not be able to find the corresponding amount on my return.  I didn't click the checkbox under line 1a during the TT interview, because I thought it only applied to incorrect 1099-K amounts - that was my mistake.

I've already prepared the full 8949 form showing every personal sale transaction and since I have some investment capital gains/losses that legitimately need to go on the 8949, I probably will submit the 8949 with all the personal sale items (corrected to zero loss) anyway.   That should satisfy any curiosity by the IRS.

[wa1fhy]

The more I think about this, the less it makes sense.  If Schedule 1 has the info box at the top for 1099-K personal item sales (all at a loss) and TurboTax doesn't include Schedule 1 during filing because there are no other Schedule 1 items, then what is the point of filling out the info box?   If the IRS looks for the corresponding 1099-K amount in my return, it will be nowhere to be found (I assume this is true both for e-file and printed mail submissions).   Or is that 1099-K amount "hidden" somewhere in the printed or e-file forms submitted?

Seems to me if there is ANYTHING written on Schedule 1, it ought to be part of my return.  Period.

[DaveF1006]

It depends. The point of filling out the information is that a 1099 K was issued and the information needs to be reported.  In Turbo Tax, instead of documenting this on a Schedule 1, there is a 1099 K Worksheet that is part of your return and reports that you had a loss on the sale of your personal items that offsets the income.

This is not reported on Schedule 1, because there is no income to report and you cannot report a loss to reduce your taxable income for the year. Instead, the entire transaction is reported in the 1099 K Worksheet as a 1099 K reconciliation. Here is how it is appears in the worksheet. If you had income for the year without the loss, this income would appear on a Schedule 1.

[wa1fhy]

Sorry to be such a pain in the neck, but I'm still not convinced.  The information block at the top of Schedule 1 for 1099-K's is new this year.  Last year, you had to reconcile things using lines 8z and 24z.  But it looks as though the IRS wants to see the 1099-K stuff right at the top of Schedule 1 this year (particularly when it is all personal items sold at a loss) and you don't have to fool around any further with income and offsets on 8z and 24z.

I understand that TT has internal worksheets that reconcile this - they are all completed accurately in my return.

BUT... By TT not including Schedule 1, how does the IRS see that I have reported my 1099-K?  Does TT transmit the internal worksheets to the IRS?  I think not.  In fact, if I just print out my return as if I was going to mail it to the IRS, Schedule 1 doesn't appear, worksheets don't appear and anything relevant to my 1099-K is absent.  This is my concern.

Incidentally, I can force TT to include Schedule 1 in my return (as I think it should) by simply going to line 8z, other income, entering "Miscellaneous" with an amount of $0.00.  Then Schedule 1, with the 1099-K info at the top, gets included in my return.

[AmyC]

Yes, the IRS tax forum this year showed me that they are pretty overwhelmed with all of the information and trying to decipher it all. They have moved things around and changed the rules. No, only the tax forms you see used are transmitted, no worksheets or other forms. You have two options at this point:

• Err on the side of caution and force the print by adding the misc income of $0 that you discovered 
• Allow the form to not be part of the return and be ready to explain it to the IRS if they decide to ask

There will be people siding with each option. I am overly cautious so I would add the form. Having over 30 years of taxes under my belt, I would say you don't need to worry about it. Go with your heart.