1099 MISC

[Mike_kimber]

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?

[DanP0428]

Federal

Income and Expenses

Other Common Income

[Kat]

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

[JillS56]

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.

[Mike_kimber]

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.

[DanP0428]

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.

[Carl]

Reporting 1099-MISC (box 3 or box 7) that is not self-employment income

Under the Wages & Income tab (or Personal Income tab) scroll down to Other Common Income and elect to start/update Income from form 1099-MISC. Then click YES to indicate you have a 1099-MISC.

Enter the 1099-MISC exactly as printed, and then Continue.

Enter the reason you got this money – be it scholarship, bonus, streaking butt naked across the 50 yard line of the super bowl, whatever. Then continue.

Select None of these apply, then Continue.

Select No, it didn’t involve work….. and Continue.

Select ONLY the tax year for which this specific 1099-MISC was issued. Do not select the year that you received the 1099. Select the year for which the 1099-MISC was issued. Select no other year. Then Continue.

Select No, it didn’t involve an intent to earn money, then Continue.

Select NO, then Continue.

Click the DONE button, and that does it.

Reporting 1099-NEC Income that is not self-employment income

Under the Wages & Income tab (or Personal Income tab) scroll down to Other Common Income and elect to start/update Income from form 1099-NEC.

Do you want to enter your 1099-NECs now? Click the “Add a 1099-NEC” button

Enter the info from your 1099-NEC, then continue.

Enter the reason you got this money – be it scholarship, bonus, streaking butt naked across the 50 yard line of the super bowl, whatever. Then continue.

Select “This is not money earned as an employee or self-employed individual. It is from a sporadic activiy or hobby (this is not common)” then continue.

Click the Done button, and you’re done.

[MarilynG1]

Per Expert @Irene2805:

"You can enter the 1099-MISC in TurboTax as "Other Common Income," which is reported on line 8 of 1040 Schedule 1 and will not generate Schedule C or SE tax.  Please use the following steps:

1. Click on Federal > Wages & Income.
2. Scroll down to the Other Common Income section. 
3. Click on the Start/Revisit box next Form 1099-MISC. 
4. On the screen Did you get a 1099-MISC?  click on the Yes button.
5. On the next screen, Let's get the info from your 1099-MISC, enter the information from the 1099-MISC.
    
6. On the following screens, answer the following questions:
   • Did it involve work that's like your main job? No.
   • You got it in 2021
   • No, it didn't involve an intent to earn money

 7.  Continue through the rest of the interview screens. The income will appear as Other Income."

[Mike_kimber]

Thank you everyone for your help. I got my taxes done and submitted.

[jjkoehnk1513]

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]

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.

[Hal_Al]

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.

[remai010558]

I followed all the steps above for 1099 Misc since my husband receives an insurance stipend.  It is not to earn money, etc.  However, as I am trying to submit my taxes, it still generates a Schedule C and wants a 6 digit Principal Business code.

What do I do?

Thanks,

Cindy

[Hal_Al]

Depending on what "insurance stipend" means, and  who is paying it and why they are paying it.;  It could actually be self employment income. 

But assuming it isn't, and the money is in box 3 of the 1099-Misc:

Enter the 1099-Misc

On the next screen Describe what the payment was for

On the next screen select "none of these apply"

On the next screen select "No it didn't involve work like my main job"

On the next screen select "I got it in 2021" ONLY (even if you get/got it in other years, this is a necessary workaround for the no intent to earn money situation)

On the next screen select No, it didn't involve intent to earn money

TT will put the amount on line 8z  of Schedule 1 as other income