Form 1099-MISC is a used to report various types of income to taxpayers. The correct way to report this income will be depend on which box of the 1099-MISC the income is shown. The program has made reporting your 1099-MISC income easy. Our program will either carry your 1099-MISC income where it needs to go or prompt you to create the appropriate form to report the income.
Effective tax year 2020 - The 1099-MISC is no longer used to report nonemployee compensation in box 7 on your 2020 tax return. Nonemployee compensation will be reported to the taxpayer using Form 1099-NEC with the nonemployee compensation listed in box 1. All prior years will still use the 1099-MISC for nonemployee compensation.
Where to enter Form 1099-MISC?
To enter Form 1099-MISC, go to:
- Federal Section
- Income -Select My Forms
- Form 1099-MISC, Miscellaneous Income
Note: If you received more than one Form 1099-MISC, you must enter them separately in your account. DO NOT combine separate 1099-MISC forms into one entry.
Here are brief descriptions for the type of income reported in each Form 1099-MISC box.
Box 1: This box is used to report rental income of $600 or more for all types of rents. For additional information, please refer to the Schedule E Instructions.
Once you make the entry and click Continue, the program prompts, “Where would you like to add the income?” Click +Create a New Schedule E Rent and Royalty to carry the rental income from Form 1099-Misc. If you already have a Schedule E created, click the three dots to the right of the Schedule E to carry the rental income to the existing Schedule E.
Box 2: This box is used to report certain types of royalties that you have received such as royalty income from intangible assets like patents, copyrights, trade names, and trademarks. For additional information regarding royalty income, you can also refer to the Schedule E Instructions. For royalties on timber, coal, and iron ore, see IRS Publication 544, Sales and Other Dispositions of Assets.
Once you make the entry and click Continue, the program prompts, “Where would you like to add the income?” Click +Create a New Schedule E Rent and Royalty to carry the royalty income from Form 1099-Misc. If you already have a Schedule E, click the three dots to the right of the Schedule E to carry the royalty income to the existing Schedule E.
Box 3: The amount shown may be payments received as the beneficiary of a deceased employee, prizes, awards, taxable damages, Indian gaming profits, payments made by employers to former employees who are serving in the Armed Forces or the National Guard, or other taxable income. The amount listed here will be pulled to line 8 of Schedule 1of Form 1040, Other Income. See IRS Publication 525, Taxable and Nontaxable Income.
Note: If it is trade or business income, report this amount directly on Schedule C instead of listing on Form 1099-Misc.
- Federal Section
- Income -Select My Forms
- Profit or Loss from Business, report on a Schedule C
Box 4: Shows backup withholding or withholding on Indian gaming profits. Generally, a payer must backup withhold at a 28% rate if you did not furnish your taxpayer identification number. See Form W-9, Request for Taxpayer Identification Number and Certification, or Publication 505 for more information.
Box 5: An amount in this box means the fishing boat operator considers you self-employed. See IRS Publication 334, Tax Guide for Small Businesses.
Box 6: For individuals, report directly on Schedule C (Medical and Health Care Payments)
- Federal Section
- Income - Select My Forms
- Profit or Loss from a Business, report on a Schedule C
*Effective Tax Year 2020 the 1099-MISC is no longer used to report nonemployee compensation.
Box 7: For tax year 2020, is a check box, If checked, $5000 or more of direct sales of consumer products was paid to you a buyer (recipient) for resale. A dollar amount does not have to be shown. Generally, you would report this information on a Schedule C and do not create a Form 1099-MISC.
- Federal Section
- Income -Select My Forms
- Profit or Loss from a Business, report a Schedule C.
Box 7: For all prior years box 7 shows nonemployee compensation. If you are in the trade or business of catching fish, box 7 may show cash you received for the sale of fish. If payments in this box are for work or services you performed as an independent contractor, this income will carry to Schedule C within your account. You received this form instead of Form W-2 because the payer did not consider you an employee and did not withhold income tax or social security and Medicare taxes. Contact the payer if you believe this form is incorrect or has been issued in error. If you believe you are an employee, call the IRS for information on how to report any social security and Medicare taxes or see Form 8919, Uncollected Social Security and Medicare Taxes on Wages.
Once you make the Form 1099-Misc entry and click Continue, the program prompts, “Where would you like to add the income?” Click +Create a New Schedule C to carry the income from Form 1099-Misc. If you already have a Schedule C, click the three dots to the right of the Schedule C to carry the income to the existing Schedule C.
The program will calculate the applicable self-employment tax you will be subject to, based on the information provided in your Schedule C entries.
Box 8: Shows substitute payments in lieu of dividends or tax-exempt interest received by your broker on your behalf as a result of a loan of your securities. Report on the “Other income” line of Form 1040 instead of on Form 1099-Misc:
- Federal Section
- Income -Select My Forms
- Less Common Income
- Income Not Reported Elsewhere
Box 9: This box is used to report crop insurance proceeds of $600 or more.
Once you make the Form 1099-Misc entry and click Continue, the program will prompt, “Where would you like to add the income?” Click +Create a New Schedule F to carry the crop insurance proceeds from Form 1099-Misc to A Schedule F. If you already have a Schedule F, click the three dots to the right of the Schedule F listed to carry the proceeds to the existing Schedule F.
Box 10: Shows gross proceeds paid to an attorney in connection with legal services. Report only the taxable part as income on your return.
Box 12: May show current year deferrals as a non-employee under a nonqualified deferred compensation plan (NQDC) this is subject to the requirement of section 409A plus any earnings on current and prior year deferrals. This amount is also shown in box 1 of the 1099-NEC.
Box 13: Shows your total compensation of excess golden parachute payments subject to a 20% excise tax. See the Form 1040 Instructions for where to report.
Box 14: Shows income as a nonemployee under an NQDC plan that does not meet the requirements of section 409-A. This amount is also included in box 1 of 1099-NEC as nonemployee compensation. Any amount included in box 12 that is currently taxable is also included in this box. This income is also subject to a substantial additional tax to be reported on Form 1040 and 1040-SR. See "Total Tax" in the Form 1040/1040-SR instructions.
Box 15 -17: Show state or local income tax withheld from the payments.
Additional Information
To view a 1099-MISC go here: click here
For additional information regarding Form 1099-MISC, please refer to the IRS Instructions.