1099-NEC and Schedule C
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Level 2

1099-NEC and Schedule C

I received a 1099-NEC with an amount in Box 1. I do NOT have an expenses with this. When I answered the question "do you have an expenses", I answered "no" and it completed the section. It did not create or prompt me for to complete a Schedule C. So, it looks like I am paying taxes on the full amount in Box 1 and there doesn't seem to be a place where it gave me credit for paying the employer side of the taxes. 

 

So, two questions: Do I always need to fill out a Schedule C even if there are no expenses? It is correct how TurboTax did it?

 

Shouldn't I get a credit for the employer tax instead of paying the fulls self-employment tax? Thanks!

1 Reply
Employee Tax Expert

1099-NEC and Schedule C

Yes, you should have a Schedule C to receive a federal deduction for half of the self-employment tax paid. TurboTax automatically reports your SE tax on Schedule SE and also calculates the deduction that goes along with it. The form will automatically be filled out and attached to your return if you have a Schedule C. 

 

Please follow these steps in TurboTax to add your Schedule C:

  1. Open your return.
  2. Search schedule c with the magnifying glass tool on the top of the page.
  3. Go to the Jump to schedule c link in the search results. 
  4. Click on Add another line of work.
  5. Follow the on-screen instructions to describe the income received from the 1099-NEC.
  6. Click Looks good at the bottom of the summary screen.
  7. Click Form 1099-NEC under Common Income for the page titled Let's enter the income for your work.
  8. Enter the data from your 1099-NEC.
  9. Since you do not have expenses, continue past the following screen.
  10. Click on done at the bottom of the info page. 

TurboTax will automatically deduct half of the self-employment tax, even if you do not have any expenses. You can confirm this by going to Preview my 1040. On Line 14, Deductible part of self-employment tax, in Part II, you will see half of your self-employment tax is deducted. 

 

If you need help previewing your 1040, please follow these steps in TurboTax:

  1. Click on Tax Tools in the left column.
  2. Click on Tools.
  3. Click on View Tax Summary.
  4. Click on Preview my 1040 under 2020 Taxes in the left hand column. 

Lastly, please make sure to delete your previous input of your 1099-NEC so it is not on your tax return twice. 

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