How do I clear the MWP qualifying as difficulty of care payments exclusion box on my 1099Misc?

[rschwamman]

I have one 1099MISC for commission I got for selling cars from my dealership.  When I entered it, it linked it to Schedule C. When I ran the smart list it tells me I can't link it since the MWP box is checked. How do I clear the box?

[rjs]

Why did you get a 1099-MISC for a commission? Was it really a commission from the dealership, or was it a spiff from the car manufacturer?

Who paid the commission to you: the dealership, the manufacturer, or someone else?

Who is listed as the payer on the 1099-MISC: the dealership, the manufacturer, or someone else?

Did you also get a W-2 from the dealership?

[rschwamman]

It was spiff from manufacturer.

[rschwamman]

I did get W2 from dealer. 

[rschwamman]

it could be either spiff or commissions from manufacturer  

[rjs · Accepted solution]

If it came from the manufacturer it's a spiff. It's not business income, and it's not wages. It doesn't matter if they call it a commission or something else.

You entered the 1099-MISC incorrectly. It should not be linked to Schedule C. Delete the 1099-MISC. If the 1099-MISC is the only income on the Schedule C, delete the Schedule C also.

To delete the 1099-MISC, go back to the 1099-MISC Summary and click the Delete button or trash can for the 1099-MISC that you want to delete. The simplest way to get to the 1099-MISC Summary is to type 1099-misc in the Search box, then click the link that says "Jump to 1099-misc."

After you delete the 1099-MISC, enter it again. I assume the payment is in box 3. After you enter the 1099-MISC, continue through the questions until you get to the screen that says "Does one of these uncommon situations apply?" On that screen, select "This was a manufacturer's incentive payment" and click Continue. ("Manufacturer's incentive payment" is the IRS term for a spiff.) The income will be reported as other income on Schedule 1 line 8z.

[rschwamman]

Thank you!

[rschwamman]

I have another question:

My friend and I bought a car and are doing a Turo short term rental.  We have a LLC set up and have $5k revenue and more loses!  Do we file form1065(schedule K-1)? Do we just say 50% ownership?

[rjs]

If you and your friend are both members of the LLC, the LLC is treated as a partnership for income tax purposes. That means that the LLC has to file it's own Form 1065 partnership tax return, separate from your personal Form 1040 joint tax return. The partnership return will include a Schedule K-1 for each partner. You each have to enter the information from your Schedule K-1 in your personal tax returns.

You cannot use TurboTax Online to prepare the Form 1065 partnership return for the LLC. You have to use TurboTax Business (which is not the same as TurboTax Home & Business). TurboTax Business is available only as CD or download software that you install on your computer, and only for Windows. Go to the following link for more information about TurboTax Business, and to purchase it.

TurboTax Business

The filing deadline for partnership returns is March 15, not April 15, and late-filing penalties are high. You can request an extension to September 15 if necessary.

[dshahraki]

My TurboTax keeps flagging that. But I did receive it as payment to my business, NOT as spiff, and I need it linked to my Schedule C. When I unlink it, then TT gives me multiple errors about having more loss on my Schedule C than I have earnings. 

[JamesG1]

If you are wanting to report the 1099-MISC as income within the Schedule C, you may be able to delete the original 1099-MISC.

Depending upon how the 1099-MISC was entered, you may be able to remove the 1099-MISC by following these steps:

• Down the left side of the screen, click on Tax Tools.
• Click on Tools.
• Click on Delete a form.

Then enter the income directly into the self-employment activity or Schedule C at the screen Let's enter any additional income for your work.

You may select Form 1099-NEC or Other self-employed income, includes cash and checks.

@dshahraki 

[dshahraki]

I deleted the 1099-MISC in the income section and then re-entered it through the Schedule C. I never checked the MWP box but the error continued. I finally went down to that section of the form showing in the Review window, selected MWP, then deselected it. 

The error review still pulled up this form so I did it again. This time it's clear. 

I feel that TurboTax is having some issues this year. Since I downloaded the NY State return and restarted my computer, TT has crashed twice just for clicking Continue in various sections. Also, now the magnifying glass for Search is not working.