How to handle a 1099-MISC reporting income from a Bank Promotion

I got 2 separate 1099-MISC, in 2017, each for $100, from my investment bank for money i was given by this bank as a promotion for me opening two new accounts (and transferring in a certain amount of new money).

Turbo-Tax now categorizes these two 1099-MISC as self-employment income, taxing the amount with social-security tax etc, and even asking me to take self-employment expenses on this money!

Is this the correct way to categorize this money? can I consider this money as some kind of self-employment (e.g. like consulting)?

I was frankly expecting this money to be reported as part of my bank interest payment (and be part of a 1099-INT). Should i may be instead re-categorize manually these two amounts as interest (by deleting the two 1099-MISC and adding manual the amounts in my other bank interest payments)?

please advise. Thx.

1386

Level 7

Apr 13, 2018 11:35:43 AM

No, you should place this 1099-MISC amounts on Line 21 for MISC income. This should have been reported using box 3 on Form 1099-MISC. You can still enter this in the Form 1099-MISC section, but how you answer the follow up questions will determine where the payment is placed on your return and you may not have answered the questions correctly during the follow up -

Log into your account
Click Take Me to My Return (must click this first)
Use the search icon in upper right-hand corner (looks like a magnifying glass)
Search for “1099MISC”
Click the "jump to 1099MISC" link
This will bring you to the 1099MISC summary page and you can add/edit your 1099-MISC forms here

When you get to the follow-up questions make sure you indicate that (1) It did not involve work like your main job and (2) It did not involve an intent to earn money. This will tell the program to treat the payment as Misc Income and place it on Line 21 instead of treating it as business income.

If this doesn't work, then delete out the 1099-MISC entries from the SUMMARY screen (don't just remove the amounts as it may keep the forms in the return) and then reenter the income using this method that will also place it on Line 21.

To enter this miscellaneous income -

Click on Federal Taxes (may say Personal if using desktop Home and Business)
Select the Income tab
When the page opens, click "Jump to full list” if it is not displaying the full list of income items.
Scroll down to the very last item, Less Common Income and click “Show More” to expand the list
Select "Miscellaneous Income, 1099-A, 1099-C”
Select “Other Reportable Income” - the very last item (There is another “other” category that is the first choice - do not use that one)
Enter the income amount and a description (such as 1099-MISC Income) and this will place the income on Line 21 of Form 1040

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How to handle a 1099-MISC reporting income from a Bank Promotion