Income in Box 7 of 1099-MISC

[cbmarsh]

My wife has commission earned as a travel agent. The company sent her a 1099-MISC with that income recorded in Box 7, and labeled nonemployee compensation. It looks like this needs to go on Schedule C, but when I go to the business income section it starts asking for information about a self-owned business. Since she works under the travel agency name, she doesn't have any self-owned business. I don't know what to enter  for questions about the business name and tax ID number. Her personal info, or the info from the company who paid her?

[DianeW777]

Yes, it definitely goes to the Schedule C.  I might add they are using an old form to report.  The correct reporting form now is 1099-NEC.

The name of the business would be your wife's name and the address would be your home address even though she may be going to the travel agency to do the work.  There is no separate tax ID aside from her social security number (SSN). An entry is not required for that unless she actually had one.  There is no need for one unless your wife was planning to hire employees herself.

The form they report the income on indicates to the IRS your wife is self employed. You use only her personal information, not the company that pays her.

As far as the Business Activity Codes you can  use the link to find the most appropriate code for her business.

• How do I report income from self-employment?

[cbmarsh]

Thanks, but I feel like I'm caught in a loop. When I follow the instructions I am asked if I had any income reported on a 1099-MISC, and the answer is yes. But then it wants me to to fill out that information, but I can't because there is no place to enter Box 7. If I answer that I don't have any 1099-MISC income, that's not true!

[RobertB4444 · Accepted solution]

That's because there isn't supposed to be a box 7 on the 1099-MISC.  Box 7 is just a tickmark box that says "Payer made Direct sales totaling $5000 or more of consumer products to recipient for resale."  The amount paid to your wife should be in box 3.

Here is a link to the current form 1099-MISC.  If your form doesn't match this then you need to have your wife inform the brokers that she's working for that they've used the wrong form.

@cbmarsh 

[cbmarsh]

So for the purpose of filling out Turbotax  I should treat this as a 1099-NEC?

[DawnC]

The process is the same whether it is a 1099-nec or 1099-misc for self-employment income.  Non-employee compensation should be reported on form 1099-NEC.   But you should enter it as a 1099-misc unless the issuer gives you a corrected form.   TurboTax will treat it correctly and transfer the income to Schedule C.   TurboTax will ask all the business set-up questions no matter if it is a 1099-nec or 1099-misc, because it is self-employment income.   As @DianeW777 stated above,

 
The name of the business would be your wife's name and the address would be your home address, even though she may be going to the travel agency to do the work.  There is no separate tax ID aside from her social security number (SSN).  An entry is not required for that, unless she actually had one.  There is no need for one unless your wife was planning to hire employees herself.

** You use only her personal information, not the company that pays her.   She is the business owner and those paying her are her clients/customers.   Once you set up the Schedule C business information, you will be able to link all 1099s to that business, so you only answer the set-up questions ONCE, and then you can link as many 1099s to that business schedule C as you need to.   

[cbmarsh]

But if I enter it as a 1099-MISC, which is what she actually received, what box would I enter the income in, since there is no box 7 on the 1099=MISC?

[DawnC]

When you enter the 1099-MISC, the amount should be in Box 3.    Box 7 is just a checkmark and is not required for the entry.   After you enter the amount in box 3, TurboTax will ask for a description, use travel agent income or something similar, then choose None of the above for the uncommon situations questions.    Then choose Yes, it involved work like my main job.

After that, TurboTax will allow you to link the amount in Box 3 to a business schedule c (it will be named whatever you used as a description when entering the form.   TurboTax will transfer the amount from box 3 to the schedule C, and she will be able to deduct her business related expenses to lower her net income and tax.   

Deduct business expenses, including tax preparation costs

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