I received a 1099-NEC for a Christmas bonus, I'm not under their payroll but because I do work for someone else in the same building they gave everyone a Christmas bonus. Now I'm filing my taxes and its telling I need to create a business to report it under Schedule C. This was not business related just a Christmas bonus? Please help.
To enter a Form 1099-NEC that is not for self-employment -
Or enter 1099-nec in the Search box located in the upper right of the program screen. Click on Jump to 1099-nec
On the screen Did you get a 1099-NEC?, click on Yes
On the screen Do You Want to Enter Your 1099-NECs Now?, click on Add a 1099-NEC
On the screen Let's get the info from your 1099-NEC, enter your information and Continue
On the screen Describe the reason for this 1099-NEC, enter a reason and Continue
On the screen Does one of these uncommon situations apply? -
Select This is not money earned as an employee or self-employed individual, it is from a sporadic activity or hobby and Continue
This will enter the income on Schedule 1 Line 8z. The total from Schedule 1 Line 10 flows to Form 1040 Line 8 as ordinary income.
thank you for your response for some reason I didn't see that option but now I do, thanks again.
Appreciate your help above! Follow-up: I also received a 1099-NEC but I'm not self-employed. I received this form because my previous company decided to repurchase my shares (which I had purchased after exercising NQ options). The amount listed on box #1 /Nonemployee compensation/ is the TOTAL proceeds from the repurchase (not just the gains on top of my tax basis).
Two questions for you:
1. Should I follow the same steps to enter this into TurboTax?
2. Is the amount on the form correct? Shouldn't it only reflect the gain (proceeds less basis)?
TIA for your help!
A buyback of stock should be reported as a sale of an investment on the Schedule D. For the sale, you will enter the full sale proceeds and the cost basis and difference will result in the capital gain.
I would recommend contacting your employer due to the buyback of stock is typically not reported on a 1099-NEC.