Have you fixed 1099-MISc reporting so that income that is not employment related does not show up on Schedule C in error

[mkolthoff]

Not all 1099-Misc is related to income.  Get your people to figure it out and do taxes correctly.

[Opus 17]

Box 7 is assumed by the IRS to be self employment and so Turbotax assumes that too unless you show otherwise.  What exactly did you do to get this income and how is it reported?

[SweetieJean]

OP asked same Q last year:
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3228828-how-can-i-get-misc-income-to-not-show-up-on-schedule-se">h...>

[mkolthoff]

I understand that Box 7 is non employee compensation.  However, there are other boxes on a 1099 Misc that do not show up on Schedule C.  I had a problem with Box 3 showing up on Schedule C and also calculating Self employment tax which is an error and would cause additional taxes that are not owed.  My question is, how to enter the Box 3 income so it shows up on Line 21 of the 1040.

[Texas Roger]

How you answer the questions in the interview after entering the 1099-MISC determines whether it is entered as other income on line 21 or on Schedule C. If you answer in such a way that would lead the IRS to define it as self employment income or other income that you must pay self employment taxes on, TurboTax will put it on Schedule C.

[SweetieJean]

OP still hasn't told us the nature of the money he received.

[mkolthoff]

It is Box 3 on 1099 MISC related to investment income from UBS

[SweetieJean]

Why are they reporting it on a 1099-MISC?

[mkolthoff]

Because it is not interest or dividends.  I don't know but Turbo tax should still handle it correctly.

[rjs · Accepted solution]

"My question is, how to enter the Box 3 income so it shows up on Line 21 of the 1040."

Here's how to enter a 1099-MISC with income in box 3 in TurboTax so that it is reported on Form 1040 line 21.

• Click the Federal Taxes tab.
• Click Wages & Income.
• Click "I'll choose what I work on" or "Jump to a full list."
• On the screen "Your 2016 Income Summary," scroll down to the section "1099-MISC and Other Common Income." Click the Start button for "Income from Form 1099-MISC."
• The next screen asks "Did you get a 1099-MISC?" Click Yes.
• On the next screen enter the information from the 1099-MISC form, then click Continue.
• TurboTax will now ask a series of questions about the 1099-MISC income. Answer as follows, even if some of the answers aren't true.
• "Describe the reason for this 1099-MISC." - It doesn't matter what you enter. Enter a short description such as "Investment income." Click Continue.
• "Does one of these uncommon situations apply?" - Select the last choice, "None of these apply," and click Continue.
• "Did the income involve work that's like your main job?" - Select No and click Continue.
• "How often did you get income for {description}?" - "I got it in 2016" will already be checked. Don't check any of the other boxes. Just click Continue.
• "Did the income involve an intent to earn money?" - Select No and click Continue.

This will report the income as Other income on Form 1040 line 21 with the description "Other Income from box 3 of 1099-Misc."

[Texas Roger]

If you are using the CD/download product, open up forms and open the 1040 and then the Other Income Statement from line 21. Enter the amount on line 3a of the Other Income Statement "Substitute payments in lieu of interest or dividends" or line 3b "Other Income from box 3."

[SweetieJean]

Try this:

If you answer the question 'Did the activity involve the intent to earn money?' as 'NO', it may put the income in the correct place. 

[mkolthoff]

That was the answer last year.  What a dumb question.  I answered yes because it was an investment.  They subsequently took that question away.  Only Box 7 should be schedule C income.

[SweetieJean]

Sorry, we are just other users, not TT employees. But why is UBS reporting this on a 1099-MISC?

[Opus 17]

Blame the IRS.  Investments are UNearned income.  Income from working is earned and this subject to SE tax.

See this site, <a rel="nofollow" target="_blank" href="https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/earned-income">https://w...>

Turbotax has to follow the IRS language even if the IRS language is not intuitive to non-experts.