I have received a 1099-MISC from my brokerage account for portfolio related income and TurboTax is applying self employment tax. Is that correct?

Forum|Forum|3 years ago
February 15, 2023
1 reply
0 views

This self employment tax treatment seems to be appropriate for 1099-NEC or 1099-K but not the 1099-MISC for investment related income.

TurboTax Online

Best answer by PattiF

Follow these instructions to enter the portfolio-related income as Other Income, not self-employment income.

Follow these steps in TurboTax Online:

In the Federal section, under Your income and expenses
Scroll to Other Common Income
Select Form 1099-MISC
Follow the Prompts and enter amount in Box 3, Continue
Describe the reason for this 1099-MISC box
Do any of these uncommon situations apply? check last box
Select No, it didn't involve work like my main job on Did theportfolio income involve work that's like your main job?
Answer How often did you get income...Although you may receive this income every year, say that you only receive the 1099-MISC only in 2022, not in previous years and not in 2023, you will then have the screen where you can say that it did not involve an intent to earn money.
Select No on Did the portfolio income involve an intent to earn money?

PattiFAnswer

Follow these instructions to enter the portfolio-related income as Other Income, not self-employment income.

Follow these steps in TurboTax Online:

In the Federal section, under Your income and expenses
Scroll to Other Common Income
Select Form 1099-MISC
Follow the Prompts and enter amount in Box 3, Continue
Describe the reason for this 1099-MISC box
Do any of these uncommon situations apply? check last box
Select No, it didn't involve work like my main job on Did theportfolio income involve work that's like your main job?
Answer How often did you get income...Although you may receive this income every year, say that you only receive the 1099-MISC only in 2022, not in previous years and not in 2023, you will then have the screen where you can say that it did not involve an intent to earn money.
Select No on Did the portfolio income involve an intent to earn money?

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

gpause1264Author

Thank you, that resolved the issue and eliminated the self employment tax. I am a bit concerned that I followed your instructions not to mark receiving this income in 2021 even though I did.

This 1099-MISC was from a joint brokerage account and is reported under my SS# but TurboTax does not give me the option to report the income as being for both of us.

GeorgeM777

If you received the income in 2021 then you should report such income on your 2021 return. Can you provide some more information about the portfolio income. For example, is it dividend income? Or is it capital gain income? Portfolio income could be your share of profits from a managed account. Thus, if you could provide some additional information about the nature of the portfolio income that would help us to better understand your tax situation.

Are you filing a joint return? If so, then the income from both spouses gets reported on one return.

@gpause1264

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"