1099-MISC for investment income

Forum|Forum|5 years ago
March 19, 2021
1 reply
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I received quarterly payments in 2020 for a callable medium term investment product. The payer has listed them on 1099-MISC box 3 Other Income but Turbo-Tax insists on treating this as self-employment income, including creating self-employment forms and a self-employment tax liability (my taxes would otherwise be zero, I believe). Did the payer incorrectly list this income on 1099-MISC rather than 1099-B or 1099-INV, or is there a question I'm answering wrong about it in the TurboTax dialog? To be clear, I did no work to earn this, only invested a sum of my own money with JPMorganChase. I'm retired and had little other income than Social Security in 2020.

Best answer by ColeenD3

Delete the first 1099-Misc to clear out the program and then enter as below.

You can enter the 1099-MISC in TurboTax as "Other Common Income," which is reported on line 8 of 1040 Schedule 1. Please use the following steps:

Click on Federal > Wages & Income.
Scroll down to the Other Common Income section.
Click on the Start/Revisit box next Form 1099-MISC.
On the screen Did you get a 1099-MISC? Yes
Enter the information from the 1099-MISC.
On the following screens, answer the following questions:
- Did it involve work that's like your main job? No.
- You got it in 2019
- No, it didn't involve an intent to earn money

7. Continue through the rest of the interview screens. The income will appear as Other Income.

Here's the general procedure for viewing the forms list and deleting unwanted forms, schedules, and worksheets in TurboTax Online:

Open or continue your return in TurboTax.
In the left menu, select Tax Tools and then Tools.
In the pop-up window Tool Center, choose Delete a form.
Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

DavidD66

It definitely doesn't belong on Schedule C as self-employment income. Can you clarify and explain what kind of investment this is?

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b8singst0keAuthor

I invested a sum with JPMorganChase structured so they paid interest (5.5% APR) quarterly as long as none of three market indexes hadn't lost 30% of their starting value; I received 3 quarterly payments in 2020, which the investment firm through which I bought it has listed as miscellaneous on 1099-MISC instead of as interest on -B or -INT. It's a callable note/bond and the conditions were met (barely) so interest was paid.

Thanks for your reply, didn't see it right away.

Carl11_2

Employee

See if this does the trick. Don't know if it will or not for your specific situation.

Reporting 1099-MISC (box 3 or box 7) that is not self-employment income

Under the Wages & Income tab (or Personal Income tab) scroll down to Other Common Income and elect to start/update Income from form 1099-MISC. Then click YES to indicate you have a 1099-MISC.

Enter the 1099-MISC exactly as printed, and then Continue.

Enter the reason you got this money – be it scholarship, bonus, streaking butt naked across the 50 yard line of the super bowl, whatever. Then continue.

Select None of these apply, then Continue.

Select No, it didn’t involve work….. and Continue.

Select ONLY the tax year for which this specific 1099-MISC was issued. Do not select the year that you received the 1099. Select the year for which the 1099-MISC was issued. Select no other year. Then Continue.

Select No, it didn’t involve an intent to earn money, then Continue.

Select NO, then Continue.

Click the DONE button, and that does it.