Received payment for an OT settlement. Total was $2,348 but was sent a W-2 for $782 with taxes withheld (entered in Wages portion of TT) and 1099-Misc for $1,565. Entering the 1099MISC as a lawsuit prompt TT to ask if any part was for wages, so I answer, but really the $1565 was for penalties and interest. With that said, no matter how I am entering it I am being asked to provide information for Schedule C and Form 3514 which I do not have. What am I doing wrong?
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It sounds like it was handled correctly by the payer -- the lost OT is paid on the W-2 with tax withheld, and the amount paid on the 1099-MISC is non-wage settlement money (penalties, interest). In that case it is taxable but not earned income and does not require a schedule C. Don't check the "wages" box, and answer the test questions as no -- not like your regular job, no intent to earn a profit, no plan to do the same work in the future.
In other words, no part of the 1099 is wages.
Thank you. I've entered everything as indicated and TT is still requesting information for a schedule C. Where is it pulling this data from? I can't figure it out and it won't let me move on to filing. This is the first time in 8 years I've had any issues with TT.
The settlement should be in box 3, not box 7. If in box 7, it is harder to get the program to accept it as "other" income. There should be a series of testing questions like "is this similar to your regular job", "did you intend to earn a profit" and so on. You need to answer those questions as far away from the idea of work as possible (mostly answering no.) If the money was in box 3 but you indicated it was wages, that might have created a blank schedule C.
Try deleting the 1099-MISC from the income page (there should be a trash can icon) then go to the bottom right where it says something like My Account; click that link and run through the options until you get to "Remove a form." (They've changed the wording, I don't know exactly where it is this year.) Remove schedule C. Log out, log back in, and enter the 1099-MISC again making sure to pick the choices that will have it show up as other income instead of self-employment.
Also, check your version of Turbotax, if using Turbotax online, you might have been bumped up into the Self-Employment version. If you want to get back to the cheaper Deluxe version, you need to "clear and start over" which will do exactly that, start you over from scratch in the deluxe version, that should also clear the 1099 and schedule C (along with everything else.)
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