1099-NEC Legal Settlement Problem "Missing Info!"

Forum|Forum|2 years ago
April 6, 2024
3 replies
48 views

I am running into a problem where TurboTax Home and Business want to report a 1099-NEC for my wife as "self-employment." However, it is not self-employment. They are two lawsuit settlements. I understand they are taxable. When I step through the process, Turbo Tax has an error that wants to keep reporting it as sell employment income. Which it is not.

When I select a settlement, it does not let you do anything else. It says it is "Missing Info"

I need to get a fix for this problem.

TurboTax Home & Biz Windows

jsgoodrichAuthor

Level 2

DaveF1006

Level 15

Yes, unfortunately reporting a 1099 NEC through proper channels in the program does lead to a Schedule C. There is a better way to report but before you do this, delete your 1099 NEC entry first and get that dreaded Schedule C out of your program.

Once this is deleted, go to tax tools>tools>delete a form>delete Schedule C and all of its worksheets if these are still there.

Now log out of your program and then back in to see if this annoying schedule appear again. Now let's enter this so that it doesn't appear like it's self-employed income.

Log into your account
Select Wages and income
Less Common income
Miscellaneous Income, 1099-A, 1099>start
Scroll to the bottom of the page to Other Reportable Income
Other taxable income, answer yes
Then give a brief description of the income and the amount listed. For the description, enter this as "Lawsuit Settlement Reported on a 1099 NEC and the amount.

@jsgoodrich

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jsgoodrichAuthor

Level 2

The problem is I do need the Sch C. for some work I do do on my own.

I did find a solution.

If you go to the 1099-NEC form, you can select other income.

That solves the problem, it also does not have it reporting on the Sch C.