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Mister-Nice-Guy
Level 2
May 16, 2021
Question

Can any 1099-NEC Experts HELP???

  • May 16, 2021
  • 4 replies
  • 16 views

Self employed independent contractor and received:

1099-NEC 

With $12,500 in box 1

Consisting of:
$10,000 gross income per a settlement payment.

and
$2,500 paid income service receipt, which I believe is taxed self employment taxes.

ANYONE know how to enter this into Turbo Tax live??????

4 replies

ToddL99
Level 13
May 16, 2021

The entire amount reported in Box 1 of the 1099-NEC is considered "self-employment" income. 

 

(If you have reason to believe otherwise, you would need to explain the payments in more detail).

 

Enter it in the Self-employment interview of TUrboTax Self-employed or Home and Business.

 

Enter "1099-NEC" in the Search window and select "jump to 1099-NEC" from the search results.

 

See the attached screenshot for aid in navigation:

 

 

 

Mister-Nice-GuyAuthor
Level 2
May 16, 2021

Thanks, it's nice to get help!

I'm on Turbotax live.

Not sure what you meant by "reason to believe otherwise" though?

I had an out-of-court settlement for $10,000 that was combined on the 1099-NEC with the $2,500 of services I provided.

Totaling $12,500 in box 1.

The "settlement" is listed as "settlement" on the original check stub I still have.  

ToddL99
Level 13
May 16, 2021

In most cases the proceeds of a settlement are taxable income to the recipient (you).

 

If it was for back-wages or for any work you performed, then it is considered "self-employment income" and must be reported on Schedule C and Schedule SE.

 

(If the settlement was for physical injury, it would not be taxable and not subject to self-employment taxes).

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