Report the IRS 1099-K income, then reverse out the income. Follow these directions.
- Down the left side of the screen, click Federal.
- Down the left side of the screen, click Wages & Income.
- Click Show more to the right of Other Common Income.
- Under Your income and expenses, click the Edit/Add button to the right of Form 1099-K.
- At the screen Did you get a 1099-K? click Yes.
- At the screen How would you like to enter your 1099-K? click Type it in myself. Click Continue.
- At the screen Choose which type of income your 1099-K is for, select the button for Other income. Click Continue.
- At the screen Let’s get the info from your 1099-K, enter the information. Click Continue.
- At the screen Your Other 1099-K income, you enter further information for the Other income. Click Continue.
- At the screen Your 1099-K summary, notice that the income relates to Other income. Click Done.
Other income may need to be reversed if some or all the income reported on the 1099-K is not accurate. Post the negative entry as follows:
- Down the left side of the screen, click Federal.
- Down the left side of the screen, click Wages & Income.
- Click Show more to the right of Less Common Income.
- To the right of Miscellaneous Income, 1099-A, 1099-C, click the Start / Revisit button.
- To the right of Other reportable income, click the Start / Revisit button.
- At the screen Other Taxable Income, enter a description such as “Incorrect form 1099-K [amount]” and a negative amount.
The entry will be reported:
- on line 8z of Schedule 1 of the Federal 1040 tax return, and
- on line 8 of the Federal 1040 tax return.
Make sure that you keep records of all transactions. Later, you may need to demonstrate to the IRS that this is not taxable income.
@lmduprey