My employer gave me a 1099-MISC (box 3 filled out) for a bonus from the sale of the company. How do I correctly enter this in turbotax?

[geri_52]

There will be additional bonuses that come from the sale funds, which are being paid out incrementally over 3 years. Where should this income be posted in my tax return, and do I continue to file it the same way for future payments?

[PatriciaR]

Here are the steps to enter your 1099-MISC Box 3:

• Sign into your TurboTax account and click Take me to my return
• In the Search box (upper right of program) search 1099 misc
• Click the "Jump to" link from results
• You will be in the correct area to enter your 1099-MISC with a Box 3
  

NOTE: There are two places in TurboTax to enter 1099-MISC and you want to enter under Other Common Income, not Self-Employment in order to see Box 3

Click on screenshot below for more detail

For future 1099-MISC, you will file using the same steps above.

[lim0]

Its 2020 and my employer gave me a 1099-MISC form with box 3 checked. When I try to do this on the software version of turbo tax (downloaded to desktop), the software thinks I own my business. Did my employer meant to give me a 1099-NEC form in 2020?

1099-MISC 2019 used to have a field for box 7 (non-employee income) but its now moved to 1099-NEC in 2020. 

[DianeW777]

No, your employer did not mean to give you a Form 1099-NEC. It sounds like it should have been included in your W-2, however it can be reported accurately. 

Follow the steps below to enter the 1099-MISC bonus income in TurboTax.

The bonus will be included in the total wages on Form 1040 line 1. On the dotted line to the left of the amount on line 1 there will be a notation "F8919" and the amount. Form 8919 will be included in the return, with reason code H in column (c). Form 8919 will calculate the Social Security and Medicare taxes that your employer should have withheld from the bonus. The total of these taxes will appear on Schedule 2, line 5,  and will be included in your total tax liability.

1. Click the Federal Taxes tab. (In TurboTax Self-Employed or Home & Business click the Personal Tab.)
2. Click Wages & Income. (In TurboTax Self-Employed or Home & Business click Personal Income.)
3. Scroll all the way down to the last section "Less Common Income." Click the Start button for the last topic, "Miscellaneous Income, 1099-A, 1099-C."
4. On the next screen click the Start button for "Other income not already reported on a Form W-2 or Form 1099."
5. The next screen asks "Did you receive any other wages?" Select Yes and click Continue.
6. The next two screens ask about household employee wages and sick or disability pay. Click Continue on these two screens without entering anything.
7. The next screen asks "Did you earn any other wages? Select Yes and click Continue.
8. The next screen asks the source of the other earned income. Select "Employee compensation that was not reported on a W-2." Ignore the note that says not to enter compensation for which you will receive a 1099. Click Continue.
9. On the next screen, "Employee Compensation Not Reported on a W-2," click Continue.
10. If you are filing a joint return, you will get a screen asking which one of you the income is for. Select your name and click Continue.
11. On the next screen, "Report Your Wage Income," enter the employer's name and EIN from your W-2. When entering the EIN, you must enter the hyphen after the first two digits. For Total Wages Received, enter the amount on the 1099-MISC. Select Reason Code H. Click Continue.
12. On the next screen, "Report as Wages," click Done.
13. This returns you to the Miscellaneous Income screen. Click Continue.