It's "wrong" because I am a self employed artist, and TT listed it on that Schedule C. I removed it and put it on my form 1040, line 21, other income.
It's "wrong" because I am a self employed artist, and TT listed it on that Schedule C. I removed it and put it on my form 1040, line 21, other income.
SRECs are not from selling electricity to a power company. SRECs are a government-created incentive, through which power companies purchase certificates based on the power that you produce and register with an aggregator. My SREC aggregator sent me a 1099-MISC with the proceeds listed in BOX 3, Other Income, not BOX 7.
@tjwillard I understand that. I know what SREC's are; the question was where on my return to report the income (as you can see from my comment above I have since decided to put it on my 1040 Line 21). If I may ask, where on your return did you report your SREC income?
I'm still trying to figure that out. Turbo Tax doesn't tell you what line it is on until you've pretty much completed your taxes. After I had entered my W-2, 1099-I, Schedule C (for a different business), I clicked on something that let me enter other income. Then TT says that I can do expenses against it. So it loops me back to Schedule C again.... it's maddening.
All I want to do is put the dollar amount in line 21 and move on with my life. TT seems to think that SRECs are a business and wants me to pay employment taxes.
@tj: I hear ya! Here's how I overrode the TT entry: open up forms and go to your schedule C and remove the entry. Then while still in forms, go to your 1040 and enter the amount on line 21. It worked for me. It's still income, but no self employment tax. I have no problem explaining that to Uncle Sam, if he should ask, but I think he's busy auditing somebody else's return 🙂
Okay, I think I figured it out. When entering the SREC earnings from BOX 3, this is not income for services rendered. Therefore, on the next screen, I had to select that this was a manufacturer's incentive payment. This was the closest thing to reality, since I'm not a farmer, tribal gaming member, Alaska Permanent Fund member, lawsuit winner, gambler, etc. This allows me to avoid the Schedule C, which will happen if you select "none of the above".
Many people who sell electricity from their solar panels receive a 1099 from the power company. If
you have "Non-employee compensation" (Box 7 of a 1099-MISC),
according to the IRS it is considered income from self-employment. You are
considered to have a self-employed "business" and you are the
"owner". TurboTax will help you report it as Business Income on
a Schedule C or C-EZ.
If you have a Box 7 entry, the only other recourse is contacting the payer to reclassify the income and issue a corrected 1099-MISC to yourself and the IRS. Otherwise, enter the 1099-MISC exactly as the paper form reads.
The good news regarding this is, if you are in the "business" of selling SREC's, you can deduct ordinary and necessary expenses of the business. One may be the depreciation of the solar panels.
Follow these steps to enter your Business Asset:
1. Click the "Business" tab in TurboTax,
2. Click "I'll choose what I work on."
3. Scroll to Business Assets
4. Click Start on Assets Being Depreciate
5. Follow the instructions on screen to enter the details of the asset