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Level 2

Question

1099 MISC

Forum|Forum|4 years ago
March 3, 2022
4 replies
10 views

I am a car salesman. I received a 1099-MISC form from the manufacturer. Every time I enter it Turbotax says I have to claim a business. I am not a business. What do I do?

TurboTax Business Windows

taxlady28

Level 10

Federal

Income and Expenses

Other Common Income

Kat11_2

Alumni - Champ

What were you being paid for? Which box on your tax document contained the payment?

*** I am NOT a tax expert. I am a seasoned TurboTax user, and volunteer to provide assistance to TT users. Nothing I post is to be considered TAX ADVICE; I bear no legal liability for responses.***

Mike_kimberAuthor

Level 2

It is an incentive the car manufacturer gave to employees of dealerships to continue to sell cars. It is marked in Box 3 Other Income. However Turbotax will not let you move on without creating a business.

taxlady28

Level 10

I have worked with hundreds of those 1099-MISC for car salemen incentitives. You do not need to create a business. You just need to file as I indicated above. If you created a business by mistake delete the business and just file it aa Other Common Income.

JillS56

Level 10

Form 1099-MISC use to be used for non-employee compensation but now the Form 1099-NEC is the form for non-employee compensation. However, if Box 2 is the box with a number, it is going to ask you for a Schedule C or Schedule E. The correct form in your case would be Schedule C.

With that said, if you are a car salesman and you are paid based on commissions that is considered as self-employment income for tax purposes. The 1099-MISC should be reported on a Schedule C. You will want to link the 1099-MISC to a Schedule C. You can deduct any expenses related to your work that are not reimbursed to you by the company. Otherwise, all that will be on Schedule C is the commission you received. This income is subject to self-employment taxes.

To fill out the top part of the form, simply complete the type of business - product; you will have to pick a business code for car sales, and the name of the company you can use the company name on your 1099-MISC. The tax ID number can be left blank.

jjkoehnk1513

Level 2

1099 entered on Turbo tax form as shown on 1099-Misc form. Error message won't allow me to transmit message. Income amount $28.25 on 1099 Misc. Instructions not clear on how to correct entry.Since its only $28.25 can I remove it from the tax form. How do I do that?

JamesG1

Level 15

Are you able to delete the entry by clicking on the trashcan icon to the right? Enter $0 if you cannot remove it from the tax return.

Is the income reported in box 3 of the 1099-MISC? If so, follow the steps below to report this income that is not reported as self-employment income.

Select Federal from the left side menu.
Click on Wages & Income.
Scroll down to Less Common Income. Click Show more.
Click Start / Revisit to the right of Miscellaneous income….
Click Start / Revisit to the right of Other reportable income.
At the screen Other Taxable Income enter the description of the income.

View the entries at Tax Tools / Print Center / Print, save or preview this year's return / Include government and TurboTax worksheets.

The income will be listed on line 8z of the Schedule 1 Additional Income and Adjustments to Income and line 8 of the Federal 1040 tax return.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

Hal_Al

Level 15

SPIFF

SPIFF (Special Performance Incentives for Field Force) payments reported on Form 1099MISC; (1) are not treated as wages, (2) are not subject to federal income tax withholding, social security, Medicare, or federal unemployment tax, and (3) are not considered to be self employment income and, therefore, are not subject to self employment tax. https://www.unclefed.com/IRS-Forms/2005/p3204.pdf

In TurboTax, Enter at:

- Federal Taxes tab

- Wages & Income

Scroll down to

-1099-Misc and Other common Income

- Income From 1099-Misc

On the follow up screen :Does one of these Uncommon situations apply" on the drop down list, check “This was a Manufacturer's incentive payment”

This will put it on line 8z of Schedule 1.

A SPIFF (Special Performance Incentives for Field Force) is a small, immediate bonus for a sale. Typically, "spiffs" are paid, either by a manufacturer or employer, directly to a salesperson for selling a specific product.

IRS Publication 3204 discusses spiffs for the auto industry, however the principal should apply to any spiff. The remainder of this post is from the document:

Automotive Manufacturers’ Incentive Program to Vehicle Salespersons

Did you know. . . that incentive payments paid by an automotive manufacturer are taxable income, whether made directly to individual sales persons or through a dealer?

Reporting Incentive Payments

Follow the filing guidelines below when reporting incentive payments you received from a manufacturer. If someone other than yourself prepares your tax return, make sure the preparer is aware of these guidelines:

Report the income on page 1 of Form 1040, U.S. Individual Income Tax Return under Income on the line titled “Other Income”. (currently Schedule 1 line 8z)
Do not report the income on Schedule C (Form 1040), Profit and Loss from Business, because recipients of these payments are not engaged in an individual trade or business and are therefore not self employed. Similarly, no expenses may be taken on Schedule C to offset incentive payment income.