Form 1099-MISC is used to report a variety of miscellaneous payments to an individual. The form name was changed from Miscellaneous Income to Miscellaneous Information in 2021.
To enter Form 1099-MISC in TaxSlayer Pro, from the Main Menu of the tax return (Form 1040) select:
- Income Menu
- Form 1099-MISC - Select New, and for a MFJ return indicate if the form is for the taxpayer or the spouse.
| Payment | Box | Schedule where reported |
Description | |
|---|---|---|---|---|
| 2020 fwd |
Prior to 2020 | |||
| Rents | 1 | 1 | C, E, 4835 | All types of rents. Usually linked to Schedule E, but see below for exceptions to reporting rents on Schedule E. If including on Schedule C or Form 4835, don't enter the 1099-MISC here but enter the amount of rents directly on the schedule or form in Gross Receipts. |
| Royalties | 2 | 2 | C, E | Royalties from oil, gas, or mineral properties, copyrights, and patents. (Oil or gas payments for a working interest are reported on Schedule C. Click the "Sch C" check box to link to Schedule C.) |
| Other income | 3 | 3 | 1, C, F | Miscellaneous Income that doesn't fit any other box, including prizes and awards, payments received as the beneficiary of a deceased employee, taxable damages, Medicaid Waiver (difficulty-of-care) payments, and Indian gaming profits. If it is trade or business income, click the "Link" check box to report it on Schedule C or F. |
| Federal income tax withheld | 4 | 4 | ||
| Fishing boat proceeds | 5 | 5 | C | |
| Medical and health care payments | 6 | 6 | C | |
| Nonemployee compensation | - | 7 | C, F | Before 2020 this is self-employment income. Starting in 2020, this income is reported on Form 1099-NEC. |
| Payer made direct sales of $5,000 or more of consumer products to a buyer | 7 | 9 | Check box for informational purposes only, but if checked the return will generally include Schedule C for this activity. | |
| Substitute payments in lieu of dividends or interest | 8 | 8 | 1 | Amount of $10 or more received by the taxpayer's broker as a result of a loan of their securities. Don't enter in the 1099-MISC menu, but enter the amount as Other Income on Schedule 1. |
| Crop insurance proceeds | 9 | 10 | F | Flows to Schedule F. |
| Gross proceeds paid to an attorney | 10 | 14 | Don't enter in the 1099-MISC menu. Enter the taxable portion only in Gross Receipts on Schedule C. | |
| Fish purchased for resale (new for 2021) | 11 | Pending. | ||
| Section 409A deferrals | 12 | 15a | Informational only; doesn't flow to any form or schedule. | |
| Excess golden parachute payments | 13 | 13 | Excess golden parachute payments income won't appear anywhere in the return, but the payments are subject to an excise tax of 20% included on Schedule 2 Line 17K coded EPP. | |
| Section 409A income / Non-qualified deferred compensation | 14 | 15b | Income received under a Nonqualified Deferred Compensation (NQDC) Plan that doesn't meet the requirements of Section 409A. Tax on this income will be included on Schedule 2 Line 8 coded NQDC. | |
| State tax withheld | 15 | 16 | Flows to the tax return for the state indicated. | |
| State income | 17 | 18 | Flows to the tax return for the state indicated. | |
| FATCA filing requirement (check box) | If checked, the payer issued this 1099-MISC to satisfy its chapter 4 account reporting requirement. (You may wish to check the Form 8938 instructions to see if the taxpayer has a similar reporting requirement.) | |||
Exceptions to reporting Box 1 rents on Schedule E
Rents in Box 1 are usually reported on Schedule E, but in these situations they should be reported on Schedule C or Form 4835:
- If the taxpayer provided "significant services" to the renter, such as maid service, report the rental activity on Schedule C. (Significant services do not include utilities, trash collection, or cleaning of public areas.) Provision of significant services commonly denotes a hotel or motel.
- If the taxpayer is a real estate dealer, report the income and expenses from rentals of real estate held for sale on Schedule C.
- If the taxpayer's business is renting personal property, such as a vehicle or equipment, report the rental activity on Schedule C.
- If the taxpayer is renting farm land, report farm rental income and expenses on Form 4835 if all of the following are true:
- The taxpayer is an individual (rather than a company),
- They received rental income based on crops or livestock produced by the tenant, and
- They didn't materially participate in the management or operation of the farm.
Medicaid Waiver Payments (difficulty-of-care)
If the amount in Box 3 is for Medicaid Waiver (difficulty-of-care) payments, also enter the same amount in the Medicaid Waiver Payment field. In doing so:
- If the payment is being reported as income on Schedule C, it will also be included as an "Other Expense" notated Notice 2014-7.
- If the payment is being reported as Other Income on Schedule 1, it will also be deducted on the same line notated Notice 2014-7.
Important points regarding entering Form 1099-MISC:
- If the payment is in Box 1, Rents, check the "100%" check box if the taxpayer has 100% ownership over the property receiving the rents. If not, leave the check box unchecked and adjust the ownership percentage in the property details in Schedule E.
- If the payment is in Box 1, Rents, after exiting the 1099-MISC entry screen you will be queried if you would like to link it to a Schedule E. Answer Yes or No as appropriate, bearing in mind that not linking the 1099-MISC to a Schedule E will result in the return not being e-fileable.
- If the payment is in Box 2, Royalties, click the "Link" check box to link the income to Schedule C rather than Schedule E. If checked, you will be queried if you would like to link it to a Schedule C. Answer Yes to link to Schedule C or No to link to Schedule E.
- If the payment is in Box 3, Other Income, click the "Link" check box to link the 1099-MISC to Schedule C or F and you will be prompted which schedule to link to after exiting the 1099-MISC entry screen. Otherwise, leave the "Link" check box unchecked and the amount will flow to Other Income on Schedule 1 (Form 1040 or 1040-NR).
- If the payment is in Box 5, Fishing boat proceeds or Box 6, Medical and health care payments (or Box 7, Nonemployee compensation prior to 2020) after exiting the 1099-MISC entry screen you will be queried if you would like to link it to a Schedule C. Answer Yes or No as appropriate, bearing in mind that not linking the 1099-MISC to a Schedule C will result in the return not being e-fileable.
- If the payment is in Box 9, Crop Insurance Proceeds (Box 10 prior to 2020), after exiting the 1099-MISC entry screen you will be queried if you would like to link it to a Schedule F. Answer Yes or No as appropriate, bearing in mind that not linking the 1099-MISC to a Schedule F will result in the return not being e-fileable.
Taxpayer received a 1099-MISC but believes they are an employee
Non-employee compensation is reported on Form 1099-NEC, but prior to 2020 non-employee compensation was reported on Form 1099-MISC in Box 7. If the taxpayer received 1099-MISC for non-employee compensation instead of receiving Form W-2, it is because the payer did not consider them an employee (and thus did not withhold income tax or social security and Medicare tax).
If the taxpayer believes that they are an employee and cannot get the payer to correct this form, don't enter the Form 1099-MISC in the Income menu. Rather, complete Form 8919, Uncollected Social Security and Medicare Tax on Wages. This will result in the amount being included on Form 1040 Line 1 (Line 7 for tax years prior to 2018) or for nonresident filers on Form 1040-NR Line 1 (Line 8 for tax years prior to 2019).
Note: This is a guide on entering Form 1099-MISC into the TaxSlayer Pro program. This is not intended as tax advice.
Additional Information: