1099-nec

[alyss]

I put in my 1099-nec but when I try to continue it says there are five errors. When I look at them it's stuff that's blank on my 1099-nec form. Am I missing something? I don't want to mess this up. Your help will be much appreciated.

[AmyC]

You must have payer's name, Payer's TIN, payer's address, a box with income and your information. What is the program asking you for that is not on the form?

[alyss]

These are the things it's asking,

"Qual business inc yes or no"

"1099 reqd yes or no?"

"Line g yes or no?"

"Line f-cash, line f-accrual box, or line f-other box?"

"principal business code?"

I did an online job for Lionbridge for a few months and the 1099-nec they sent me didn't have any of this on there.

[VolvoGirl · Accepted solution]

You have to answer those yourself.  See Schedule C for what you are filling out.

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf 

Qual Business Income put Yes

1099req?  Did you pay anyone else over $600?  If not say No

line g should be Yes you actively participated 

line f accounting method is CASH

Principal Business Code - 

Schedule C line B Business Code is a 6 digit number for your activity.  Here are the IRS instructions for Schedule C.  Business codes start on page 17.  If you don't see one that fits put 999999.

http://www.irs.gov/pub/irs-pdf/i1040sc.pdf

[KrisD15]

These are the things it's asking,

"Qual business inc yes or no"

"1099 reqd yes or no?"

"Line g yes or no?"

"Line f-cash, line f-accrual box, or line f-other box?"

"principal business code?"

The 1099-NEC is Non-Employee Compensation, 

so you are considered as Self-Employed, as in a business owner. 

"Qual business inc yes or no"

Are you eligible to get the Qualified Business Income Deduction? 

QBI INFO

"1099 reqd yes or no?"

Did you pay anyone, such as a sub-contractor, $600 or more and need to file a 1099 to them? 

"Line g yes or no?"

Did you "materially participate" Yes. You did the work, it is not rental or royalties. 

"Line f-cash, line f-accrual box, or line f-other box?"

You use CASH accounting. You recognize income when it is paid to you. 

"principal business code?"

Here is a link for you to decide what code to use depending on what service you provide: 

IRS LINK FOR CODE

[alyss]

@VolvoGirl Thank you so much! First time handling something like this and was beyond stressed, this helped tons!

[alyss]

@KrisD15 So much helpful information! You and @VolvoGirl  answered all my questions and gave me good resources for the future. I appreciate y'all so much!

[8717]

The 1099Nec form causes filing of schedule C and all the questions asked like Business Name, Address, Accounting, etc don't really apply .  This is for oil and gas royalties approx. $65.00.  I do not have a business this is strictly royalty income - the only thing I can answer on the schedule C is my name and address.  It also causes inclusion of self employment tax.  This is just not right for this small amount.  Is there a way to enter all this that will not cause the schedule C?

8717

[AliciaP1]

If you received a 1099-NEC for royalties you need to request the payer send you the correct form, which is a 1099-MISC.

Once you have the 1099-MISC you can see Where do I enter a 1099-MISC? to enter it correctly.

@8717

[8717]

I have a 1099 Misc for this company but this year they sent a separate 1099NEC for the non-employee compensation.  My issue is the non-employee compensation causes the return to file a form C and treat this as a business.  It wants a business name and several details about the business and it also causes me to pay self employment tax of $63.00  the total non-employee compensation is only $65.  These are very small royalties and there should be some way to show this for what  it is and not a business.  I have completed the 1099 Misc for the royalties l

8717

[MarilynG1]

Yes, a 1099-NEC always triggers a Schedule C for self-employment.

If the same company sends you a 1099-Misc to report Royalty Income, why are they also sending you a 1099-NEC?

Here's more info on Form 1099-NEC.

Self-Employment Tax is 15.3% for Medicare and Social Security Tax (which goes into your account).

On $65, that would be $9.95.

Don't forget; you can claim Business Expenses against your Business Income.   You are assessed Self Employment Tax only against your Net Business Income. 

Click this link for more info on Reporting Business Income and Expenses. 

[MM5475]

I do have a rental. And the housing authority sent me a 1099 NEC for the deposit and bonus I received for participating in abused person program. This also money I must report the same amounts on my Schedule E for my rental income and expense reports. I need help on what to do. I do not have a small business I only have a duplex that I rent.

[DianeW777]

It depends.  If the income reported on your Form 1099-NEC is for rent and rental deposits then you report the income as rental income. Keep the records with your tax return.

If there is an amount that is considered a bonus because of a service you provided in the abused person program then that portion would be considered other income and not self employment if it is not an ongoing concern where you would earn money regularly for your services (not the rental of your property).  If you decide it is 'other income' and not self employment you can enter the income as follows.

• The entry of Form 1099-NEC is a convenience and not a requirement. The IRS has a copy of the same form that you have.  You should delete any Form 1099-NEC that you have previously entered. Next take the following steps:
  • Go to the Wages and Income  section of TurboTax
  • Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C 
  • Select Other reportable Income > Enter a description (Bonus Award) and the amount

 If the deposit is actually (first or last month rent) then it is also rental income.  If the deposit is actually a deposit and is set aside in escrow, then it is not income until and unless it becomes unrestricted and you have full rights to the deposit.

• Security deposits. Don’t include a security deposit in your income when you receive it if you plan to return it to your tenant at the end of the lease. But if you keep part or all of the security deposit during any year because your tenant doesn’t live up to the terms of the lease, include the amount you keep in your income in that year. If an amount called a security deposit is to be used as a final payment of rent, it is advance rent. Include it in your income when you receive it.

@MM5475