Form 1099-MISC is used to report a variety of miscellaneous payments to an individual.
|Payment||Box||Schedule to link||Description|
|2020||Prior to 2020|
|Rents||1||1||C, E||All types of rents. Usually linked to Schedule E, but link to Schedule C if significant services were provided to the tenant or the taxpayer's business is selling real estate or renting personal property.|
|Royalties||2||2||E||Royalties from oil, gas, or mineral properties, copyrights, and patents. (Oil or gas payments for a working interest are reported as nonemployee compensation.)|
|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, and Indian gaming profits. If it is trade or business income, 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||Self-employment income. Starting in 2020, this income is reported on Form 1099-NEC.|
|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. Report as Other Income on Schedule 1.|
|Payer made direct sales of $5,000 or more of consumer products to a buyer||7||9||Check box for informational purposes only.|
|Crop insurance proceeds||9||10||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.|
|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 8 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|
To enter a 1099-MISC in TaxSlayer Pro, from the Main Menu of the Tax Return (Form 1040) select:
- Income Menu
- Form 1099-MISC
- Select New and, if prompted, indicate if the 1099-MISC is for the taxpayer or spouse
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, 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 3, Other Income, click the "Link" check Box to link the 1099-MISC to Schedule C, E, or F, if appropriate, 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 Form 1040 Schedule 1 Line 21, Other Income (or Form 1040NR Line 21, Other Income).
- 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.
Taxpayers who receive a 1099-MISC but believe they are employees
Starting in 2020, non-employee compensation is reported on Form 1099-NEC, but prior to 2020 amounts reported in 1099-MISC Box 7 are for non-employee compensation. The taxpayer received 1099-MISC instead of Form W-2 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. 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.