How do I get turbotax 2020 to put rental income reported on 1099 to schedule E income

[cdibuff]

I receive part of rents from a housing assistance agency, They provided me a 1099 with the box 1 populated with rents. I don't have any other W2 or 1099 income. My only income is rents. I have also received a 1099G for pandemic unemployment assistance from the CA EDD. In 2019 and prior years I only had scheduled E generated by TT. However, for 2020 TT is generating a schedule C as well as schedule SE. I am also assessed self employment income.

It appears TT is directing the box 1 rents into earned income. How do I correct this?

Thank you.

[pk]

@cdibuff , make sure that you are entering the form as 1099-MISC and not 1099-NEC.    The former  has box -1 as rents ( received ) and goes to schedule -E while the latter has Box-1 as Non-Employee- Compensation and  goes to schedule-C and Schedule-SE.

[cdibuff]

I have been given the 1099 MISC with the rents correctly specified in BOX 1. I am also correctly entering it as a 1099 MISC in turbotax home and business. However it does not get attributed to schedule E.

[pk]

@cdibuff  so what you are saying is that TurboTax is actually mishandling the  box 1 input for the 1099-MISC --- this is a remnant of the past  -- before the  breakaway  from the old 1099-MISC  and the new 1099-NEC and 1099-MISC.   I cannot  do anything on this directly because I do not  have my machine to try out  the situation  --  but I do believe    that this is an error on the part of TurboTax   ( updates should have  cleared this  but ...).

My solution to this would be :  (a) delete he entry of 1099-MISC completely and then  under rental income  enter  the income  as part of the  gross rents received ( suggest using  one of the details sheets  so that it shows  in the file   and  detail that 1099-MISC was received  -- so you remember what you did ) under the heading no 1099-misc received to keep the software happy.  (b)  then see if you can add an explanatory note  ( that is transmitted  with your return to the IRS, explaining  that 1099-misc was indeed received  but software  error  prevented you from entering it correctly.   Thus what you have is a Schedule-E that covers   all the  rents received and NO Schedule-C created/linked.    If IRS does send you a CP2000 saying income  not recognized , you can point the  software error and how you handled it .  

I will also  flag this to the  powers be and see if this has been  handled in the updates.

Hope this helsp

pk

[cdibuff]

Thanks ok. I will try what you suggested, however given this is so last minute what will occur if I let it slide the way it is?

[pk]

@cdibuff , if you let it slide -- (a) it will cost you more  because SE taxes are @15.3% of the net income and Schedule-C also will show income  when there was really no income.  (b) IRS will ultimately find that a 1099-MISC was not  recognized anywhere and  probably ask for more money.

My suggestion  would be  ( if there is nothing more you can do , given the  short time available ), just ignore the 1099-misc,  enter the  total rents  ( i.e. including  that shown on 1099-MISC) and  file as is --- this way the question can only be what  did you do with  the Box-1  on 1099-misc --- should not cost you anymore etc. etc.   Please do that  at least.   That way you would be safe as far as owing any taxes / penalties/ interest etc.