1099-INT as Sole Proprietor

[shoook]

I am a sole proprietor with a business checking account. I received a 1099-INT from my business banking account that was issued in my EIN as a sole proprietor. Do I enter this amount as 1099-INT on the personal portion of my return or somewhere on my Schedule C? I am concerned that if I enter it on 1099-INT worksheet that the EIN it was issued to will not match my SSN, will that matter?

[JillS56]

Yes, the 1099-INT issued to business EIN then you will report this as other income on your Schedule C.   The interest income would be reported Line 7 of Schedule C.  

[shoook]

Okay, thank you. I have seen others answer that you should enter it on 1099-INT worksheet and not on Schedule C as a sole proprietor so I wasn't sure.

Contradicting answers:

https://ttlc.intuit.com/community/taxes/discussion/i-have-a-1099-int-issued-in-the-name-of-my-busine...

https://ttlc.intuit.com/community/business-taxes/discussion/what-if-my-personal-tax-return-personal-...

https://ttlc.intuit.com/community/taxes/discussion/i-have-a-1099-int-issued-in-the-name-of-my-busine...

[JillS56]

It is my opinion that it should be on the Schedule C because the EIN on the 1099-INT is in the business.

[Mike9241]

interest income of a sole proprietorship does not go on schedule C. it retains its character as interest income and should be reported that way. otherwise, when the IRS gets your return and looks to see if that 1099-INT was reported it won't find it and then you will get a notice.  also why pay SE Tax on it and it does not qualify for the QBI, 199A deduction.  This is exactly how interest income earned by a partnership or S-Corp is reported to the owners. it's on a separate line of the K-1 and flows to the interest income section of schedule B.

[shoook]

Thank you, after thinking more about it I agree. Overall I think it makes more sense to have a mismatched EIN/SSN on a 1099-INT than a missing 1099-INT that is buried in Schedule C Misc income.

[shoook]

I just asked my CPA friend and they said that this 1099-INT should be reported on Schedule C of business...

[meh4a]

Line 7 of Schedule C is the gross income. Should the 1099-INT be reported on line 6 (other income)?

[GeorgeM777]

No, it should not.  Line 6 on Schedule C, Profit or Loss From Business, relates to other income earned in connection with the trade or business.  A 1099-INT is entered into TurboTax in the Investment and Savings section (TurboTax online) or the Investment Income section (TurboTax CD/download).   

After entering the 1099-INT into TurboTax, this interest income will appear on Schedule B, Interest and Ordinary Dividends, and it will also appear on line 2b of Form 1040.

@meh4a 

[jerrypeters]

If it is reported on Schedule C, TT calculates SE tax for the income which is not correct. OTOH if it is reported on Schedule B the TIN/EIN doesn't match. Which is better/worse. Other options? 

[CatinaT1]

You are posting on an old thread. Are you a Sole Proprietor filing Schedule C? If so, there is no separation between you and your business for tax purposes. Your 1099-INT should not be reported as business income, it should be reported under Interest and Dividends. Please elaborate if you have more questions.

[jerrypeters]

Thank you. I agree but my 1099int is the result of earnings on a business account which uses a EIN different from my SSN. I can enter an EIN on schedule C but I cannot override the taxpayer ID for the 1099 on Schedule B. I'm afraid the IRS will not match it.

[ThomasM125]

You can enter it as other income on the Schedule C, then enter a miscellaneous expense entry (call it recategorized interest income or a similar name) for the same amount to cancel out the income. That way it will be reported on the schedule C. Just make sure you re-enter it where it belongs as interest income on your form 1040.

[Online]

Where do you re enter it?

[DaveF1006]

  You would reenter the 1099 INT in the following manner. If using Turbo Tax online:

1. Go to income
2. Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto)

If in home and business:

1. Go to personal
2. Personal income
3. Interest and Dividends
4. interest on 1099 INT

@online