Self employed independent contractor and received:
1099-NEC
With $12,500 in box 1
Consisting of:
$10,000 gross income per a settlement payment.
and
$2,500 paid income service receipt, which I believe is taxed self employment taxes.
ANYONE know how to enter this into Turbo Tax live??????
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The entire amount reported in Box 1 of the 1099-NEC is considered "self-employment" income.
(If you have reason to believe otherwise, you would need to explain the payments in more detail).
Enter it in the Self-employment interview of TUrboTax Self-employed or Home and Business.
Enter "1099-NEC" in the Search window and select "jump to 1099-NEC" from the search results.
See the attached screenshot for aid in navigation:
Thanks, it's nice to get help!
I'm on Turbotax live.
Not sure what you meant by "reason to believe otherwise" though?
I had an out-of-court settlement for $10,000 that was combined on the 1099-NEC with the $2,500 of services I provided.
Totaling $12,500 in box 1.
The "settlement" is listed as "settlement" on the original check stub I still have.
In most cases the proceeds of a settlement are taxable income to the recipient (you).
If it was for back-wages or for any work you performed, then it is considered "self-employment income" and must be reported on Schedule C and Schedule SE.
(If the settlement was for physical injury, it would not be taxable and not subject to self-employment taxes).
But wouldn't the $10,000 settlement only be taxed as gross income and I would pay less taxes on that then compared to the $2,500 which is taxed as self employment income?
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