How do I report a 1099 Misc?

[jace8910]

I didn't see an option for this form when I originally was filing

[Carl]

In what box is the income reported? That determines how you report it. Also, why was the money paid?

[jace8910]

It was money rewarded to me from a college. It is reported in box 3 called other income

[Carl]

Glad I asked. Are you a college student that was enrolled "at least" half time for "at least" any one semester that started in the tax year?
Normally, that would be considered self-employment income. So you need to be more specific here.
"rewarded" to you? Were you paid for doing something for the college? If so, it's self-employment income. You'll pay regular income tax on it, as well as the additional Self Employment Tax.  That means that as far as the IRS is concerned, you earned that income while self-employed and "in business" for yourself. It gets reported on a SCH C.
However, is this actually a scholarship or grant from the college? If so, there's a different way to handle this. But I also need to know if that income is reported to you on "ANY OTHER TAX DOCUMENT", to include a 1098-T if one was issued to you by the college.

[jace8910]

I was mailed an 1099-MISC income form from the college. I attended a class but was not enrolled in enough classes to be considered a half-time student. I was awarded this income as apart of a grant we have at the preschool I worked at. You did classes to further your education with in the field and you were awarded this money following completion of your course.

[Carl]

Okay, so your education expenses will not be deductible then. But you still don't want to claim this as self-employment income since you didn't "work" for it in that sense, from the IRS perspective. Here's how to report it, so it's not taxed as self-employment income.

Reporting 1099-MISC (box 3 or box 7) that is not self-employment income

Under the Wages & Income tab (or Personal Income tab) scroll down to Other Common Income and elect to start/update Income from form 1099-MISC. Then click YES to indicate you have a 1099-MISC.

Enter the 1099-MISC exactly as printed, and then Continue.

Enter the reason you got this money – be it scholarship, bonus, streaking butt naked across the 50 yard line of the super bowl, whatever. Then continue.

Select None of these apply, then Continue.

Select No, it didn’t involve work….. and Continue.

Select ONLY the tax year for which this specific 1099-MISC was issued. Do not select the year that you received the 1099. Select the year for which the 1099-MISC was issued. Select no other year. Then Continue.

Select No, it didn’t involve an intent to earn money, then Continue.

Select NO, then Continue.

Click the DONE button, and that does it.

[nathan3carey]

I followed these steps for a 1099-MISC I was issued in error. I registered and paid for a class from a company, then the company cancelled the class; it took me months and letters to the CEO to get a refund, and now the 1099-MISC makes it sound like I did contract work for them. When I followed these steps, I see where this is still counted as income and taxed. Is there something different I should do so I don't pay taxes for a refund?

[Carl]

Thanks for the explanation. In what tax year did you pay for the class? 2016? Same year when you got the refund?

[nathan3carey]

I paid the registration fee in November 2015, and got the refund in August 2016. The 1099-MISC states it is for 2016.

[Carl]

DId you claim the registration fee in the education section, or anywhere for that matter, on your 2015 tax return? Basically, the 1099-MISC was not sent in error. The school had to report the fee you paid as taxable income. When they paid it back to you, they  rightfully wanted to report it to the IRS, so they could get back the taxes they paid on that income.
For you what matters, is if you claimed your registration fee as a tax deduction on your 2015 return. Did you?

[nathan3carey]

No, I didn't claim the registration fee on my 2015 tax return; I would have been reimbursed by my employer had the class been offered.

[Carl]

Then don't report the income on your 2016 return. Just write yourself a note about this on the back of that 1099-MISC, and file it with your hard copy of the 2016 return, in case you're asked about it in the future. I seriously doubt you'll be asked though.