Form 1099-Misc and Schedule C

Form 1099-Misc and Schedule C

Form 1099-MISC is used to report a variety of miscellaneous payments to an individual. The form name was changed from Miscellaneous Income to Miscellaneous Information in 2021.

Certain payments reported on Form 1099-MISC need to be included on Schedule C, and depending on the box the payment is in you will enter it either in the Form 1099-MISC menu or directly in Schedule C under Gross Receipts.

To enter Form 1099-MISC in Software, from the Federal Section of the tax return select:

  • Income
  • 1099-MISC - For a MFJ return, indicate if it's for the taxpayer or the spouse.

After the first 1099-MISC has been entered, click + Add another Form 1099-MISC to add another one.

To create or edit Schedule C in Software, from the Federal Section of the tax return select:

  • Income
  • Schedule C

After the first Schedule C has been entered, click + Add a Schedule C Income from Business to add another one.

Box 1 - Rents

Rents in Box 1 are usually reported on Schedule E, but they should instead be reported on Schedule C in these situations:

  • If the taxpayer provided "significant services" to the renter, such as maid service, report the rental activity on Schedule C. (Significant services do not include utilities, trash collection, or cleaning of public areas.)
  • If the taxpayer is a real estate dealer, report the income and expenses from rentals of real estate held for sale on Schedule C.
  • If the taxpayer's business is renting personal property, such as a vehicle or equipment, report the rental activity on Schedule C.

Don't enter the payment in the Form 1099-MISC menu; enter it directly in Gross Receipts in Schedule C.

Box 2 - Royalties

Oil and gas payments from a working interest are reported on Schedule C. Don't enter the payment in the Form 1099-MISC menu; enter it directly in Gross Receipts in Schedule C.

Box 3 - Other income

An amount in Box 3 that relates to the taxpayer's business is reported on Schedule C. Don't enter the payment in the Form 1099-MISC menu; enter it directly in Gross Receipts in Schedule C.

Box 5 - Fishing boat proceeds

Enter fishing boat proceeds in the Form 1099-MISC menu, after which you will be queried if you'd like to report it on an existing Schedule C or a new Schedule C.

Box 6 - Medical and health care payments

Enter medical and health care payments in the Form 1099-MISC menu, after which you will be queried if you'd like to report it on an existing Schedule C or a new Schedule C.

Box 10 - Gross proceeds paid to an attorney

The payment in Box 10 commonly represents payment made pursuant to a settlement agreement. (Payment for legal services is typically reported on Form 1099-NEC.) Determine the taxable portion of the payment and enter it directly in Gross Receipts in Schedule C, rather than via the Form 1099-MISC menu.




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