Is anyone having trouble with 1099-MISC other income not computing in wages and not going to schedule 1 line 8?

[KathrynG3]

You may experience unexpected results because if Form 1099-MISC is for earnings, it cannot go to Schedule 1, Line 8. The only amounts going to Schedule 1 Line 8 for Form 1099-MISC Other Income must be unearned income, such as prize money.

Wages are subject to social security and Medicare tax. Form 1099-MISC is only for unearned income since what used to be reported in Box 7 is now reported on Form 1099-NEC, box 1.

If you received this form as an independent contractor, the issuer must be contacted to issue a corrected Form 1099-MISC for 0 and issue the correct Form 1099-NEC.

If this applies to you, then delete Form 1099-MISC and report the earnings in Self-employment income & expenses instead. To go there directly, enter schedule c in the search box and click the Jump to link.

For more information, see: Does a 1099-NEC or 1099-MISC mean I'm self-employed?

[frustratedwtaxes]

Yes! Doing taxes for my mom using Deluxe. She is retired and gets a 1099-Misc as a supplement payment for Medicare every year.  We have tried over and over and over and over to declare it as Other Income (and yes, we answer all the questions) but TT keeps putting it as self-employed income and asking other self-employment questions we cannot answer.  My mom should not have to complete a Schedule C.  And unless we delete the entire entry, there is no way to file because we get stuck in this "Fix this item" loop!  Completely and utterly frustrating.  

[DawnC]

It sounds like you may be in the wrong spot or not answering the questions correctly to get your mom's income in the correct spot.   What box of the 1099-MISC is the income in.   Depending on what box it is in and the fact that you answer YES to the ''Do you receive this income every year'' question, the income will be classified as Self-Employment.  

To have the income go to Other Income on Line 8 of Schedule 1, you cannot indicate that the income is reoccurring or that it is work-related, or that an intent to earn income exists.  @frustratedwtaxes

[frustratedwtaxes]

The income is in box 3 on the 1099-misc.  There are no other boxes filled in on the 1099-misc.  She is a retired nurse and was never self-employed.  She gets this "extra" income every year from the hospital where she worked as a supplement payment towards Medicare.  No matter how we answer any of the questions asked, we get stuck in a loop.  She cannot fill in any of the business info since she is not self-employed and she gets this payment every year.  There is no health care payment option listed on the other income list of items.  We put the information under "other income" and thought we had the problem solved, but TT put the income right back as self-employed when we went back to the wages & income summary page!  We've tried calling TT but the wait time is too long (over an hour) and the only help we have been getting isto  do exactly the same thing we have been doing.

[LenaH]

If extra pay was reported on a 1099-MISC in Box 3, then you will still need to pay the uncollected Social Security and Medicare tax, as well as the income tax. This could be why it is populating under a Schedule C and adding self-employment tax (which will end up being your portion of the Social Security and Medicare on this income). 

The IRS classifies this as supplemental wages, along with severance pay, taxable fringe benefits, vacation pay, back pay, and overtime. Supplemental pay is anything other than your regular pay.

Typically, supplemental wages are added to a W-2. However, there are different withholding methods for supplemental wages that the employer can consider, which are discussed in IRS Publication 15.

Per the IRS, regardless of the method employers use to withhold income tax on supplemental wages, supplemental wages are subject to Social Security and Medicare taxes. 

@frustratedwtaxes

[frustratedwtaxes]

We are not trying to not pay taxes or whatever is owed on the money, we are just trying to declare the payment where it needs to go.  If it goes on Schedule C, fine, but how then do we answer the other questions TT asks re: self-employment and business information when my mom no longer works and is not self-employed?  We do not know how to or cannot answer the rest of the questions posed by TT, and TT will not let us file without providing that information.

[ReneeM7122]

Sometimes the best solution is to delete the form and begin again.  If the income did not come from a 1099 (that you have) then TurboTax may have created it because of an answer that you may have provided during the interview.  

How do I view and delete forms in TurboTax Online?

• Open or continue your return in TurboTax.
• In the left menu, select Tax Tools and then Tools.
• In the pop-up window Tool Center, choose Delete a form.
• Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

Without seeing your return, we can't tell the source of the payment but you can go back to the interview and answer the income questions carefully after you've removed the 1099 form.

@frustratedwtaxes

[DawnC]

To set up the Schedule C, you can answer the questions as follows and if I missed something, just ask:

• Is the business named - NO - she uses her own name
• Address - her home address
• Work description is nursing or whatever the supplemental pay is for (TurboTax will auto populate the business code)
• No EIN - it is not needed
• No Employees
• No 1099s needed

The income will go on Schedule C and will be on Line 3 of Schedule 1 instead of Line 8.    If she has any business type expenses related to this income, those can be deducted in the Expense section as well. 

@frustratedwtaxes

[colclasuret]

Yes, we have this problem every year.  My wife gets the same 1099-MISC as a reimbursement for Medicare premiums. 

It is not wages.  It is not subject to FICA taxes. 

She is a retired union member.  All retired members from her union get this reimbursement.  Since thousands (maybe millions?) of union members get this reimbursement, you would think that this would be a common issue.  However, most of the experts who respond on here don't know about it.  Because the filing procedure is slightly different each year, I usually end up calling for help.  The end result is that there is no Schedule C and the amount gets reported as Ordinary Income.  

I can't help you with the step-by-step procedure at the moment.  When I find out, I will report back here.

[DaveF1006]

Here are the steps for reporting a 1099 MISC and not report it as Schedule C income.

1. Go to federal>income and expenses>all income>>show more 
2. Other common income> Start
3. Form 1099-MISC,>start
4. After entering the 1099, it will ask the reason for it, mention this was reimbursement for Medicare premiums.
5. Does one of these uncommon situations apply say none
6. Did the XX involve work that's like your main job? Say no
7. How often did you get income for XXX? You can say you got it in 2020.
8. Next screen asks, Did the xx involve an intent to earn money? say no
9. If you answer correctly in these precise steps, you will not be required to fill out a Schedule C.

@colclasuret

[colclasuret]

DaveF1006,

     Thanks very much.  This is the best answer.  However, I see the prompt telling me to "Mark as Best Answer", but I don't see where to do that.