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ladymia526
New Member

In direct sales, on the 1099 theres no income. Do I report the product purchased to fullfill orders? How does this work?

 
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ToddL
New Member

In direct sales, on the 1099 theres no income. Do I report the product purchased to fullfill orders? How does this work?

Form 1099-MISC Box 9 reports information rather than income. Basically, the company reported to the IRS that you purchased over a specific amount of their products for resale. This implies that you will report this activity on Schedule C as income/expenses from self-employment. When you enter Form 1099-MISC, leave Box 9 blank.

You do not have to report the product you purchased for resale, but if you sold those products you need to report that income on a Schedule C and take a deduction for the cost of what you sold.

Follow these steps to get to where you need to start entering the details to create the Schedule C. 

  • Log into your account and click orange Take me to my return button
  • Type schedule c in the Search box in top right corner
  • Click on jump to schedule c and this should bring you to the Did you have any income and expenses for a business in 2016? screen and you choose Yes there and go through entering your business info until you get to the Let's get income for xxx screen. You will choose Additional Income there for that 1099-MISC. 
    • If you have already started entering your information, the jump to schedule c will take you to the page that says Here's the business info we have so far and you just click Edit there if you need to add anything. But at this point, Schedule C should already be generated

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