1099-Misc for medical payment

[aj181]

I received a 1099-misc for a lump sum insurance payment for breast cancer. The amount of $5000 is in box 6. Every time I try to enter this into TurboTax, it wants me to put my business information. I do not have a business. Please help.

[ReginaM]

I am sorry about your breast cancer, to enter your 1099-Misc into TurboTax follow these steps:

1. While you are in your Tax Home,
2. Select Search in the top right hand side of your screen,
3. Enter 1099-Misc,
4. Select Jump to 1099-Misc,
5. You will go through a bunch of questions, but make sure to pay attention to the two shown below:

This should then place this income on your Line 22 - Other Income.

[aj181]

Hi. Thank you for your response and your condolences! The great news is that I am now cancer-free...

There is still a problem when entering my information.

As soon as I try to enter box 6 and box 17, the amount and the state, the very next screen says

"Select the business that generated the income of $5000."

The radio buttons are a blank space or a box to fill in the text for a name of a company, and has a note below it stating, "this will be added as a business."

I do not see any further questions to answer. If I leave everything blank, I then get 11 errors on the error check and it wants me to fill in the name of the business, address, etc...

Can you please help?

Thanks again,

AJ

[KrisD15]

If this payment covered medical expenses, it would not be taxable income.

If this was a reimbursement for expenses you claimed as a deduction, (or something else) claim it as other income. 

Please delete that 1099-MISC and enter it this way:

Click Federal

Click Wages & Income

Click “See All Income” if needed

Scroll down (PAST SELF-EMPLOYMENT) to “Other Common Income”

Click “Show more”

Scroll down to “Form 1099-MISC”

Click Start

Enter the 1099-MISC and Continue

On the “Describe the reason for this 1099-MISC” screen type in something like “Insurance payment” and Continue

Select “None of these apply” and Continue

Select “No, it didn’t involve work like main job” and continue through the interview selecting the appropriate answers for this one-time payment.

The amount from the 1099-MISC will be reported as Other income on the 1040 line 7a, not as Self-employment