How do I enter non-employee compensation from Form 1099-MISC?
Non-employee compensation appears on line 7 of Form 1099-MISC. Excerpted from the 1099-MISC Instructions, the following items are some common examples of payments reported on box 7 (see the instructions for full details and other references):
- Professional service fees.
- Directors' fees.
- Payment for services.
- Non-employee fees or commissions.
- Payments to non-employee entertainers for services.
- Exchanges of services between individuals in the course of their trades or businesses.
- Taxable fringe benefits for non-employees.
- Fish purchases for cash.
If a 1099-MISC was received reporting an amount on Form 1099-MISC, line 7, an entry can be made on screen 99M, line 7. Make a selection from the For drop list so the software will know which form or schedule to which the compensation should flow.
For self-employed income, select either:
- C - Schedule C, Profit or loss from business.
- If the only income or expenses related to the 1099-MISC, you can just enter the 1099-MISC on the 99M screen and the Schedule C will be produced in view, even if no data has been entered into the schedule C screen.
- Note this only applies if there is a single Schedule C being referenced. If there are two (or more) 1099-MISC forms that correspond to two (or more) different C screens, then both (or all) C screens must be entered in order for the data to be carried.
- If there is only one C screen and you enter a 1099-MISC with a MFC of something other than 1 then you will get EF Message 5036 directing you to enter the corresponding C screen so data can be carried properly.
- F - Schedule F, Profit or loss from farming.
- You must create Schedule F in data entry.
- Otherwise, the amount flows to Schedule 1 (or Form 1040) and EF Message 5034 is produced.
For other income, select:
- 1040 (default selection if none is made).
- The amount flows to:
- Schedule 1, Part I, line 8 (Drake19 and future)
- Schedule 1, line 21 (Drake18)
- Form 1040, line 21 (Drake17 and prior),
- Note 119 is produced to advise that the income is not considered self-employed income.
- See the instructions with Form 1099-MISC for more information.
- E - Schedule E, Supplemental Income or Loss
- You must create Schedule E in data entry.
- Otherwise, the amount flows to Schedule 1 (or Form 1040) and EF Message 5033 is produced.
- 4835 - Form 4835, Farm Rental
- You must create Form 4835 in data entry.
- Otherwise, the amount flows to Schedule 1 (or Form 1040) and EF Message 5035 is produced.
- 8919 - Uncollected Social Security and Medicare Tax.
- Form 8919 is produced in view, even if no data has been entered into the 8919 screen in data entry.
- Be sure to choose the Reason and enter the Date Received at the bottom left of the 99M screen.
Use the Multi-form code field to enter the correct schedule or form, if more than one is present in the return (if no entry is made, then it defaults to the first form).