How do I add a Mexican 1099 form? I did remote work for them. The Payer's Tin # has letters and numbers, a format not accepted. Do I have to report that? And how?

[professora]

They sent me a 1099-MISC, after I asked. The work was done remotely, from California, in January 2020. The total amount was around US$2,000.

[LenaH]

Yes. You have to report all income on your tax return. You should report this income under foreign income, rather than on the 1099-MISC screen. You would only qualify for the foreign income exclusion if you lived and worked in another country.

You may qualify for the Foreign Tax Credit if you paid, accrued, or owe taxes on foreign income that is also subject to U.S. income tax. 

To report your foreign income, please follow the steps below:

1. Open your return.
2. Search for foreign income.
3. Answer Yes for the question Did you make money outside of the US?
4. Click on A Form 1099-MISC for the question What Form Was Foreign Income Reported on?
5. Follow the on-screen instructions.

For more information, please see Do I need to report foreign income? and What does or doesn't qualify for the Foreign Tax Credit?

[professora]

Thank you for your answer.

I have two follow-up questions.

1. After I click on "A Form 1099-MISC," the next screen says, "Enter Your Gross Profit From Foreign Self-Employment." Is it there where I add the amount showed on my 1099? 

Because I did that, and the amount I own didn't change. That'd mean I don't need to pay US taxes for that work. Is that correct?

2. If I'm living in the United States and get paid by a foreign company as a self-employed, why does that income is not reported on Schedule C, like my others 1099? I know I said the TIN # format is not accepted, but I want to make sure I'm doing it all correctly.

[MaryM428]

The 1099 form that they created is not going to work in TurboTax because the EIN number is not in the correct format.  So select A statement from my foreign employer (could be cash).  Most of the questions that follow will not apply so leave them blank.  If you did not live outside the US and did not pay taxes to Mexico on the income.

Steps to Follow:

• Delete the 1099 that you entered.
• Wages and Income
• Foreign Earned Income and Exclusion
• Yes to Did you make any money outside the U.S.?
• Check A statement from my foreign employer (could be cash)

Just save the 1099 with your 2020 tax records and do not attempt to enter it in TurboTax.