Vanguard 1099-MISC with no Schedule C or other accompanying documentation

[please_help]

Vanguard issued to me a consolidated Form 1099-MISC with ONLY Box 3 containing a number. The Box 3 total is the sum of "contract fees" for "ETN" assets I held during 2021 (and continuing holding today). The TurboTax software is insisting that "A Link to Schedule C or another form is something we need to get your info in the right place." TurboTax only allows me to enter data into the Schedule C block of Box 3 of the TurboTax generated 1099-MISC copy - perhaps wanting me to re-enter the Box 3 total next to "Schedule C"?  When I do this, the total is never saved NOR does the TurboTax software retain the Vanguard Payer's TIN format I select. I'm caught in one endless loop. Vanguard provided no such "Link" or accompanying documentation; this discrepancy is preventing me from continuing with my tax filing. What can I do?

Thank you for your attention and assistance.

[LeonardS]

You may enter the amount in Box 3 of your 1099-MISC as income not subject to self-employment tax.  TurboTax will no longer insist that "A Link to Schedule C or another form is something we need to get your info in the right place."

To enter your 1099-MISC Box 3 in TurboTax follow these steps:

1. Log in to your TurboTax account if it is not open.
2. Select the Wages & Income tab.
3. Scroll down to Less common income click Show more.
4. On the page Let's Work on Any Miscellaneous Income click on Other reportable income.
5. n the page Any Other Taxable Income?  select yes.
6. On the page, Other Taxable Income enter 1099-MISC for the description and the amount.
7. Select continue and answer No on the next page.

[please_help]

Deleting my original 1099-MISC and following the above advice, this document now - as before - perpetually "requires review" and remains errantly viewed as "self-employed work" by TurboTax Premier Online. Specifically, now I am to (1) "Check the box at the top of Schedule C to indicate that the taxpayer's name and the business name are the same, to remove this error message," (2) enter an "Accounting Method" onto the "Schedule C, (3) enter "Material Participation" onto the "Schedule C," (4) Answer "Did you make any payments in 2021 that would require you to file Form(s) 1099?" on the "Schedule C," (5) enter a "Zip Code" onto the "Schedule C," (6)  enter a "State" into the "Schedule C," (7) respond to "Qualified business income - yes or no. We are missing some important info. Please return to your business and complete that topic," (8) enter an "Address" onto the "Schedule C," (9) reflect that a "Principal Business Code must be entered. Enter a valid 6 digit business activities code between 000001 and 999000, or enter 999999," and (10) enter a "City" onto the "Schedule C." Again, this income is NOT self-employment; rather, it is proceeds from "net investment income." No matter how a 1099-MISC originates, TurboTax automatically labels it as "self-employment income and expenses," necessitating a non-existent Schedule C. No matter how many times I proceed, TurboTax requests me to "review" this entry and, again, cannot save Vanguard's "Payer's TIN." 

Additional, alternative advice is requested please. Thank you.

[DianeW777]

The Form 1099-MISC is not required to be entered to complete your tax return.  It's a convenience since the IRS already has a copy and it's not a document that must be filed with the tax return itself. As long as the income is present in your tax return, and is being reported the following steps will assist you.  Next there will be a link provided to remove the Schedule C from your return, if necessary after completing your income entry. The following steps are slightly different than those previously posted.

Please follow the instructions below to report Other Income:

1. Click Federal Taxes -> Wages & Income and scroll down to Less Common Income
2. Go to the last selection, Miscellaneous Income and click Start
3. Go to the last option, Other reportable income and click Start
4. When it asks, "Any other reportable income?" > yes and then type in a description and the amount to report it on your tax return.
5. TurboTax Online and TurboTax CD/Download will use the same procedure
   1. How do I view and delete forms in TurboTax Online?
   2. How do I edit or delete a 1099-MISC?

[please_help]

DianeW777:

Thank you for your suggestion. While on the "Other Taxable Income" page, I encounter the following text: "Do not enter income reported on Form 1099-MISC." If I were to input my 1099-MISC Box 3 sum here, I appear to be not following official TurboTax policy despite doing so completely removing the Schedule C Loop I had been stuck in all weekend while attempting to do the right thing. Is there somewhere else I could enter this information without encountering a similar 'Don't do this' disclaimer? "Other income not already reported on a Form W-2 or Form 1099" looked promising; but once inside, the word "wages" is everywhere. Since net investment proceeds are not "wages," that seems like a dead-end also.

[DianeW777]

You can enter the income in "Other income not already reported on a Form W-2 or Form 1099".  In this section you want to make sure you answer that this was not wages and there was not an intent to earn money.  This will report it the same way that it needs to be reported.

• You should select it was not your main job and there was no intent to earn money. This income will show up on Schedule 1, Line 8z.

It's not an issue to enter it with the steps provided earlier, but this will provide the same results.

[please_help]

DianeW777:

Thank you for the swift follow-up. Unfortunately, any income input using the "Other income not already reported on a Form W-2 or Form 1099" menu is automatically described as "wages" by TurboTax - there is no way around this declaration. Given my continued inability to sever the relationship between "Form 1099-MISC" and "Schedule C," it appears "Other reportable income" is my only option of inputting the contracts sum without associating it with "wages" or populating a "Schedule C" within TurboTax. If I were to proceed with inputting this data into "Other reportable income," where will the sum be tabulated - also on Schedule 1, Line 8z?

By proceeding above, how legally negligent am I being in signing this tax return? I've tried to complete this annual custom in good faith and agree to pay all taxes properly due to the authorities above me, but this year's TurboTax software is completely failing me in this mission.

[DianeW777]

Yes, 'other reportable income' will show up on Schedule 1, Line 8z.  You are not negligent by signing the tax return as all income in good faith is being reported and taxed on your return based on your statements.

The information reported to you on your Form 1099-MISC is not self employment income and therefore is entered correctly using this process.  It can be confusing, however there are so many reasons this form is issued.  This process allows you to include the income without incurring additional tax that you are not required to pay.  We are always here to assist with these types of situations that are outside of routine transactions.

@please_help

[please_help]

DianeW777:

Thank you for the assurance that I am not doing anything unethical, immoral, or illegal by moving the 1099-MISC Box 3 (brokerage) investment proceeds onto Schedule 1, Line 8z. This is the first year I have held "ETN" assets in my brokerage; given their relative commonality and lucrative returns, I don't foresee liquidating my association anytime soon. However, in the 2021 TurboTax Premier Online user interface, there simply is no reasonable manner to report these incomes following either Form 1099-MISC link as each result in the same "self-work earnings and expenses" endpoint. I hope Intuit re-examines its Form 1099-MISC coding to accommodate the many non-"self-employment" reasons why such a document may be received by U.S. citizens before the 2022 tax return season begins.

Per your expert recommendation, I have filed my 2021 taxes with the recording of these non-wage Form 1099-MISC earnings as "Other reportable income" - encountering no error discrepancies (per the TurboTax software) in the process. 

Thank you, again, for your guidance and patience, DianeW777. I pray my experience filing next year's non-wage Form 1099-MISC (Vanguard) earnings from these investment assets proves less dramatic.

Cheers.

[A Random Guy]

This explanation also helped me a great deal. Thank you very much.