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March 23, 2023
Question

I need to offset income earned (not self employment) with adjustments to income (Schedule 1, line 24z) I cannot figure out how to do this on TT. Any ideas?

  • March 23, 2023
  • 2 replies
  • 0 views
I received a 1099-NEC. But it was for money that I already spent - it was just a reimbursement, however the issuer sent me a 1099-NEC that I have to report as income which it is not. Looking to offset with an equal amount in adjustments to income.

2 replies

Critter-3
March 23, 2023

The correct way to handle to avoid IRS letters in the future would be to put it on the Sch C (where the IRS expects it) and make an expense entry for the same amount to effectively zero out the income.  

March 23, 2023

Critter-3 is correct that the IRS will presume that 1099-NEC income will be reported on Schedule C.

 

A negative income entry may be entered on Schedule 1, line 8z by following these steps:

 

  • Down the left side of the screen, click Federal.
  • Down the left side of the screen, click Wages & Income.
  • Click Show more to the right of Less Common Income.
  • To the right of Miscellaneous Income, 1099-A, 1099-C, click the Start / Revisit button.
  • To the right of Other reportable income, click the Start / Revisit button.
  • At the screen Other Taxable Income, enter a description such as “1099-NEC income reversed” and a negative amount. 

The entry will be reported:

 

  • on line 8z of Schedule 1 of the Federal 1040 tax return, and 
  • on line 8 of the Federal 1040 tax return.

Make sure that you keep records of all transactions. Later, you may need to demonstrate to the IRS that this is not taxable income.

 

@andr414822 

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