If I have a 1099Misc from legal services from my employer how do I fill it out?

[surz5762]

My company issues me a 1099Misc for legal services how do I report it?

[MinhT1 · Accepted solution]

If you receive a form 1099-MISC for a legal service plan, then you are not considered as self-employed and do not need to file a Schedule C.

In TurboTax, enter your form 1099-MISC and follow the interview until you arrive at the page titled Did this involve an intent to earn money?. Answer that this did not involve an intent to earn money. The amount will be reported as Miscellaneous income and will not be subject to Self-employment tax.

In TurboTax, there is a work-around. Although you may receive this income every year, say that you only receive the 1099-MISC only in 2021, not in previous years and not in 2022, you will then have the screen where you can say that it did not involve an intent to earn money.

[surz5762]

Just check for only the year of the taxes you're working with. Do not check any other year even if you received the 1099 every year.

[MinhT1]

@surz5762

Yes, this is the internal work around in TurboTax to get to the question Did this involve an intent to earn money? so that you can answer No.

[laff2216b209]

1099 Misc - erroneously enter as self-employment .  Interview does not provide choice of "Did this involve an  intent to earn money"

[GeorgeM777]

If you were not self-employed, then you can report the 1099-Misc as "other income."  Other income will appear on line 8 of your Form 1040 and you will pay tax on that income.  In TurboTax online, to enter the 1099-Misc income amounts as other income, follow these steps.

1. go to Income & Expenses,
2. scroll down the page to the last item Less Common Income, select Miscellaneous income,
3. then from the list select Other reportable income. 
4. you will have to enter the amount you earned plus a short description. 

If you are using TurboTax Online, here are the steps to follow to preview your Form 1040 and see the amount on line 8:

       Open or continue your return.

1. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
2. With the Tax Tools menu open;
3. Select Tools.
4. Next, select View Tax Summary in the pop-up.
5. Then Preview my 1040 in the left menu.
6. Select Back in the left margin to return to the page where you left off

Regarding whether someone is self-employed or not, the IRS has stated the following:

• If you weren't an employee of the payer, where you report the income depends on whether your activity is a trade or business. You're in a self-employed trade or business if your primary purpose is to make a profit and your activity is regular and continuous.

Here is the link to the IRS webpage that discusses 1099-Misc, Independent Contractors and the Self Employed from which the above quote was obtained.  You might find this information helpful.  

1099 Misc, Independent Contractors and Self Employed

@laff2216b209