How can I enter a 1099-MISC (Nonemployee compensation) for a legal services benefit? Clearly, this is not self-employed income.

[MinhT · Accepted solution]

If you receive a form 1099-MISC for a legal services benefit, then you are not considered as self-employed and do not need to file a Schedule C.

In TurboTax, enter your form 1099-MISC and follow the interview and answer that this did not involve an intent to earn money. The amount will be reported as Miscellaneous income and will not be subject to Self-employment tax.

Please see the attached screenshot:

[markpops]

I am not seeing that option to select ("Did not involve an intent").  How do I get to that?

[MinhT]

In TurboTax, there is a work-around. Although you may receive this income every year, say that you only receive the 1099-MISC only in 2018, not in previous years and not in 2019, you will then have the screen where you can say that it did not involve an intent to earn money.

[spookiesdad]

Why not correct this to have the Intent/No Intent boxes show up no matter what year-of-receipt selection is made.    I'm guessing this would save a lot of people a lot of time and wasted brain cells trying to figure out why TurboTax keeps sending this 'Income' to Business Income for this exact scenario.  Of course i guess if the 1099 issuer had put the income in Box 3 (Other Income(i.e. not for services rendered)) rather than Box 7 (Non-Employee Compensation(when this really is not compensation from the benefit provider), this whole issue could have been avoided, but what do i know.....