Misc-1099 box 10 not self employed

[Taxed2026]

When I enter this info from this form it triggers an entry for taxable attorney fees paid. Then it mistakenly asks for job type. Its attorneys fees not any income earned. How do I fix this?

[PatriciaV]

Form 1099-MISC reports miscellaneous income, which in most cases is related to a self-employed business or job. Were you paid legal fees by the entity who sent you the 1099? If so, do you work in the legal profession? If not, you may be able to report these fees as Other Income.

1. Open your return and navigate to Wages & Income.
2. Scroll down to Add More Income.
3. Scroll down to Less Common Income. Click Show more.
4. Add/Revisit Miscellaneous Income, 1099-A, 1099-C.
5. Scroll to the bottom of the list and Start Other reportable income.
6. Say Yes to Any Other Taxable Income?
7. Enter a description "Legal Settlement from Form 1099-MISC Box 10" and the amount from Box 10.

This entry will report the income on Form 1040 Line 8 instead of creating Schedule C.

[Taxed2026]

No it was not for income. I was not self employed.  It was for attorney's fees.  But its triggering the self employment process when I enter it in using the misc 1099.

[ThomasM125]

You need to review your Form 1099-MISC entry and say "no" to the questions regarding the income being related to your main job, having received it in the prior or future year and received with the intent to earn a profit. Those questions are designed to determine the nature of the activity that produced the income. You need to indicate that the income is not associated with self-employment so TurboTax will treat it as "Other Income." The answers will not appear on your tax return.

[Taxed2026]

Its not even asking me those questions. It immediately goes to taxable amount for the attorney's fees then says what's your new job as this is schedule c. 

[DianeW777]

There is no requirement for you to enter the 1099-MISC and it does cause confusion occasionally depending on how you answer the follow up questions. 

The action to remove these questions is to delete the Form 1099-MISC from your return. You have your copy and the IRS has theirs, if you need it in the future you will keep it with your tax files.  The income is taxable and not self employment so for this reason you should enter the income only using the steps provided and placed here for your convenience. This places the income in the appropriate location without Schedule C.

1. Open your return and navigate to Wages & Income.
2. Scroll down to Add More Income.
3. Scroll down to Less Common Income. Click Show more.
4. Add/Revisit Miscellaneous Income, 1099-A, 1099-C.
5. Scroll to the bottom of the list and Start Other reportable income.
6. Say Yes to Any Other Taxable Income?
7. Enter a description 'Legal Settlement from Form 1099-MISC Box 10' and the amount from Box 10.

You will see this on your 1040, line 8 (also Schedule 1).

Delete the 1099-MISC using the link below for your software version.

• If you're using TurboTax Online software and need to delete a form, click here.
• If you're using TurboTax Desktop software and need to delete a form, click here.

@Taxed2026 

[Taxed2026]

Hello, im not getting any questions to determine the nature of the 1099 misc. According to the Attorneys im not responsible for taxes paid directly to them. When I entered it in as other income it taxes it using the method above. Is the software glitched?

[DianeW777]

No, the software is not glitched. You are required to report the amount of the money used to pay the attorney even though it didn't actually come into you hands.  It is part of the award you received regardless of your payment for attorney fees.  

• Treatment of Payments to Attorneys - IRC 6041 and 6045 state that when a payor makes a payment to an attorney for an award of attorney's fees in a settlement awarding a payment that is includable in the plaintiff income, the payor must report the attorney's fees on separate information returns with the attorney and the plaintiff as payees. Therefore, Forms 1099-MISC and Forms W-2, as appropriate, must be filed and furnished with the plaintiff and the attorney as payee when attorney's fees are paid pursuant to a settlement agreement that provides for payments includable in the claimant's income, even though only one check may be issued for the attorney's fees. Click the link above for more information.
• Can I deduct legal fees on my taxes? Review the information here to see if you qualify for any deduction of those fees. Typically it's only if it's for business use.

@Taxed2026 

[Taxed2026]

So did the company put the amount in the wrong box? This is what's triggering it as a job? Was it supposed to be in box 3? Income?

[DianeW777]

No, it is in the correct box, which is why you should report it as indicated in my response and an earlier response. The income  is 'Other' so it makes sense to list it there. The only trigger as a job comes from answers to the follow up questions as indicated such as whether this income is related to your main job, was there an intent to earn a profit which directly lead to self employment. Both should have a 'No' for an answer.

@Taxed2026 

[Taxed2026]

The issue is im not getting those questions when I entered it in as box 10. Its just taking me to how much is taxable.  Then to a new job description dialog box. 

[ThomasM125]

The amount listed in box 10 is for compensation paid to an attorney. If you are an attorney then that income would be considered self-employment income. Since you are not an attorney, it is likely the amount was put in the wrong box.

A work-around solution would be to report the form as stated. Then, add an expense for "misclassified fees" or something similar, to cancel out the income. Then, report the income as "Other Income". Your other option is to simply report it as "Other Income" and when the IRS inquires about it explain to them what happened and that would likely resolve the issue.

To report other income in TurboTax:

1. Go to the Wages and Income section of TurboTax

2. Choose Less Common Income then Miscellaneous Income, 1099-A and 1099-C

3. Choose Other Reportable Income and follow the instructions

[Taxed2026]

Im extremely confused.  But its listed as money paid to an attorney.  Do I claim it then deduct it as misc. Income? 

[PatriciaV]

If you are certain the attorney fees should not be taxed, you can enter another 1099 with the same amount as a negative number. In this way, the two 1099's will cancel out. Remember to enter both 1099's using the instructions below; one to report the amount from Box 10, the other to report an equal amount of expense.

To claim these fees in TurboTax, you can make a negative adjustment on Schedule 1.

• Go to Wages & Income
• Less Common Income
• Select Miscellaneous Income, 1099-A, 1099-C
• Select Other Reportable Income
• Any Other Taxable Income? Select, yes. 
• On the Other Taxable Income page: enter description: “Deductible Attorney Fees”
  Amount: enter in the adjustment amount as a negative number.

This adjustment will appear on Schedule 1 Line 8z (reducing Total Income) and is included on the amount on Form 1040 Line 9.