NSF Review Panel

[sukrit]

In 2023 I served on a review panel (provided review services) for the National Science Foundation (NSF). I traveled to Washington D.C. to do so. They paid us a fixed sum of money (documented with a 1099-NEC) and advised us to track our travel expenses to deduct them on our taxes.

I purchased TurboTax Home and Business Download. I entered the 1099-NEC under Personal --> Personal Income. I then entered the travel expenses under Business--> Business Income and Expenses. However, now it is asking me to fill in information for a "S-Corp". Do I need to found a corporation to deduct my expenses?!

[PatriciaV · Accepted solution]

No, the income from Form 1099-NEC and the related expenses should not be reported on Schedule C (Self-Employment). You will need to delete these entries and follow these steps:

Open your return and go to Federal >> Wages & Income >> Other Common Income >> Income from Form 1099-NEC. Click Start/Update.

Or enter 1099-nec in the Search box located in the upper right of the program screen.  Click on Jump to 1099-nec.

1. On the screen Did you get a 1099-NEC?, click on Yes
2. On the screen Do You Want to Enter Your 1099-NECs Now?, click on Add a 1099-NEC
3. On the screen Let's get the info from your 1099-NEC, enter your information and click Continue
4. On the screen Describe the reason for this 1099-NEC, enter a reason and click Continue
5. On the screen Does one of these uncommon situations apply? Select This is not money earned as an employee or self-employed individual, it is from a sporadic activity or hobby and click Continue.
6. Repeat these steps (add another 1099-NEC) and enter your total expenses in Box 1 as a negative number.

These entries will report the net income on Schedule 1 Line 8z Other Income. The total from Schedule 1 Line 10 flows to Form 1040 Line 8 as ordinary income.

[matita]

Hi,

I'm in the same situation trying to include my NSF review panel nonemployee compensation. But when I try to add a 1099-NEC, the first question is  'What type of income is on your 1099-NEC?' and the only options are 'self-employment', 'Farm income', 'Hobby', 'Lawsuit settlement', 'Medicaid waiver payments that qualify as difficulty of care', and 'Income that should've been reported on a W-2'. The only one that would make sense would be 'self-employment', but then it will be in section C. And if I don't fill out this section, Turbotax doesn't allow me to file my tax return with this additional income. What should I do? 

Thank you!

[PatriciaV]

Choose "Hobby," which will allow you to report this as "Other Income." The follow the steps given earlier in this thread.

@matita 

[user17748212779]

Does this still work for 2025?  

Thanks!

[DianeW777]

No, not the same way. You can still add the income and then remove it by the amount of your expenses. The tax law can be confusing and a reimbursement should not be taxable income when you are not self employed and not being paid for your time. Based on the original post, it is strictly for expense reimbursement. Follow the steps below to enter the income and the reimbursement negative. Keep the Form 1099-NEC in your file with the details of what the money was paid to you for in case you need to show it later.

Instead you will enter Miscellaneous Income using two entries, one for the income and then one for the negative expense.

Other Miscellaneous Income:

1. Sign into your TurboTax Online account
2. Go to Tax Home (left panel)  Wages and Income  section
3. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
4. Select Other reportable Income > Enter a description (----) and the amount

Other Miscellaneous Income:

1. Sign into your TurboTax Online account
2. Go to Tax Home (left panel)  Wages and Income  section
3. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
4. Select Other reportable Income > Enter a description (----) and the amount as a negative for your expenses (-100) 

You can review these entries on your Form 1040 by using the following steps.

From the left rail menu in TurboTax Online:

1. Select Tax Tools  (You may have to scroll down on the left rail menu.)
2. On the drop-down select Tools
3. On the pop-up menu titled “Tools Center”, select View Tax Summary 
4. On the left sidebar, select Preview my 1040 

For TurboTax Desktop, change to 'Forms' and review the forms 

This will report the income without any business activity and it will show up on Form 1040, Line 8 (From Schedule 1, Line 8z).   

@user17748212779