If you are a sole proprietor or an independent contractor, that is, “self-employed,” you may receive one or more 1099-MISC forms. If you’re not sure how to report income from these forms on your personal income tax return in TurboTax Home and Business, this article is for you. Here are the steps to correctly report 1099-MISC income. If you don’t do this correctly, the IRS will contact you, because you will also receive a copy of every 1099-MISC you receive, and the IRS computers will compare the total income on your Schedule C to the total income on the 1099. . Nuff said?
1. Open your Schedule C by clicking this form in the Forms view.
2. Scroll down the page until you reach Part I, Income. The second line should say “QuickZoom to Form 1099-MISC.” Click on that.
3. Create a new copy. Enter the name of the payer. Enter the name of the company that gave you the 1099-MISC.
4. You should now see a new screen titled “Miscellaneous Income.” The name of the payer must already be filled in the first field. Go to the next line and enter the payer’s EIN or social security number, whichever appears on the 1099-MISC. You can leave the account number field blank; not critical
5. If this is your spouse’s 1099-MISC, check the Spouse’s 1099-MISC box. If it’s yours, leave it blank.
6. Scroll down to Box 7, Non-Employee Compensation. This is where most self-employment income is reported. Enter the amount from Box 7 in this field. Make sure you enter the amount correctly! This is the amount that IRS computers will verify.
7. Required: Double-click to select the form on which to report this income. Double-click this field and a screen will appear that says Select Schedule C. If you only have one Schedule C, the business name for that Schedule C will appear by default. Simply click “Link” and the dollar amount will be automatically transferred to Schedule C, Line 1. If you have more than one Schedule C, select the one for which you received this 1099-MISC.
8. Go back to your Schedule C and make sure the 1099-MISC amount is there. Look on the line that says “Income transferred from the Form 1099-MISC worksheet or W-2 income worksheet.” This line should now include the amount you just entered.
