Error in Handling 1099-Misc

[Anonymous]

TT has an error when handling 1099-Misc.

When asking about uncommon situations, the option for "Other" is not offered.

When "None of these Apply" is selected, it assumes you have business income.

On Schedule 1, there is an option for "Other" to report 1099-Misc, and that is where Box 3 "Other" 1099-Misc income really should go.

Correct TT to offer an option of "Other" in addition to all the other "Uncommon Situations".  Otherwise, there is no way to avoid an incorrect schedule C entry without going back and manually correcting it.

[JohnB5677]

I'm not sure what you got the 1099-MISC for, but if you continue with the interview from "None of these Apply".

1. Did the other involve work that's like your main job? = Answer appropriately
2. How often did you get income for XXXX? = Answer appropriately
3. Did the other involve an intent to earn money? = Answer appropriately

If you answer

1. No 
2. 2021
3. No

It will not be placed as self employed.  Otherwise, it should be self-employed.

[Anonymous]

Sorry John,

Not true.  I mean you may be right with No, 2021, and No.  But you can have the intent to earn money without opening a business.  This particular 1099-Misc was provided for interest paid by a broker who borrowed securities from my account.  No, it is not my main job.  Yes, 2021.  But YES, I did intend to make money.

......and that is where it goes off the rails.  On the Forms view, there is an option to check the "Other" box, which puts the entry where it belongs on Schedule 1.  The Step-by-Step is, as I described, wrong.  It does not offer the "other" option when listing all the other things that would keep you off the Schedule C.

[DianeW777]

The question refers to you performing a service with the intent to earn money.  It is not referring to your money or securities being used to earn 'unearned' income/money.  This is the difference and I can see how it may seem unclear.

If the questions are answered as our awesome Tax Expert @JohnB5677 indicated, it does eliminate self employment income and thereby eliminates self employment tax which is not required in your situation.

The Form 1099-NEC has replaced the Form 1099-MISC for the moment (it happened in the past for a moment).  This is the reason for the questions to help you report it in the proper place.

Please update here if we can further assist you.

[Anonymous · Accepted solution]

Thank You Diane,

Yes, very unclear.  The question should be worded differently to state that your intent was to have earned income, not that your intention was to earn income.  In fact, better to just go with "Was this earned or unearned income".  Then add "other" to the list of "unusual circumstances" (though I'd hardly call earning interest unusual).  Again, if you use the forms method, it's easy.  The "other" checkbox is right where it should be.  The walk through just doesn't get you there.  It should.