Questions about 1099-MISC income

[poncho_mike]

I own shares in an Exchange Traded Note (ETN) called SLVO.  It uses a covered call strategy to pay monthly dividends from a covered call strategy on silver.  The income was reported on a 1099-MISC.  I earned this income in 2021 and 2022.  I saw an earlier statement where it was recommended that you don't check you had this income for more than one year.  In my case, I had the income in 2021 and 2022.  Last year I think I checked I got it both years.

Am I doing this correctly?  Turbotax wants to treat this as a business, but it is not.

[MinhT1 · Accepted solution]

Yes, you are doing it correctly in TurboTax.

The income reported on form 1099-MISC isn't earned income and you aren't considered ‌self-employed and don't need to file a Schedule C.

In TurboTax Online, enter your form 1099-MISC by following these steps:

1. Open your tax return
2. Click Federal in the left-hand column then on Wages & Income
3. Locate the section Other Common Income and click on the down arrow on the right
4. Click Start next to Form 1099-MISC
5. Follow the interview until you arrive at the page titled Did this involve an intent to earn money?. Answer that this didn't involve an intent to earn money. The amount will be reported as Miscellaneous income and won't 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 2023, not in previous years, and not in 2024, you will then have the screen where you can say that it didn't involve an intent to earn money. This work around is only to cause TurboTax to display the screen so that you can reply that this didn't involve an intent to earn money so that a Schedule C isn't required. This fact that you replied that you only received this income in 2023 isn't reported on your tax return.