1099-NEC

Forum|Forum|3 years ago
April 1, 2023
1 reply
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Received 1099-NEC and being led to fill out Sched C, however I'm not self-employed, this was from litigation after being terminated. The settlement does not indicate any specific reason (like back wages) and was a result of mediation (not through court). I'm not comfortable with Sched C for the reasons above. TT doesn't let me file without some association of the 1099-NEC. Not clear on next steps.

PattiF

Level 15

You can enter the 1099-NEC so that it is not self-employment income.

To exempt your 1099-NEC from self-employment tax and Schedule C:

In Wages & Income
Other Common Income
Select Income from a 1099-NEC
Select Add a 1099-NEC on Do You Want to Enter Your 1099-NECs Now?
Enter your information. Continue.
Fill in why you received the 1099-NEC in Describe the reason for this 1099-NEC. Continue.
On the screen Does one of these uncommon situations apply? Click on the box This was money from a lawsuit settlement

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Don Petersen

Level 2

PattiF-

This does NOT work. Rather, it results in a "MISSING INFORMATION" error and deletion of the form by TurboTax. If you override the 1099-NEC deletion you end up being forced in the error check to link to a Schedule C or F or something that wants to make you an employee of some sort and the income taxable.

GeorgeM777

Level 11

Are you trying to report your 1099-NEC as other income? If so, there are two ways to report income as other income in TurboTax. Both will produce the same result, yet one method involves fewer screens. Those methods are described below.

Here are the steps to enter the 1099-NEC as other income:

To enter other income in TurboTax online, click on Wages & Income, left side of screen.
Scroll down the page to Less common income, click on the drop-down arrow and select Miscellaneous Income.
From the list select Other reportable income and respond to the questions on the screens that follow.
On the screen, Other Taxable Income, you may see information indicating that you should not report a 1099-MISC in this section. Just ignore that statement and enter your information.

If you are using TurboTax CD/download, the process is similar. After selecting the Personal tab, and the Personal Income tab, scroll down the screen to Less Common Income, and select Miscellaneous Income. Enter your information.

There is another section of TurboTax that relates to 1099-Misc but you can use it to enter your 1099-NEC too. This section is Other Common Income. Please note that when working through the Other Common Income section, you will see a screen asking whether your 1099 represents an intent to earn income/money, and while it may seem counterintuitive to select No, that is the response you need to select. If you select Yes, TurboTax will report this income as self-employment income, and you will be back in the tax position you want to avoid. Thus, select No, and continue through the application.

@Don Petersen

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