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Generally, the amount from Form 1099-MISC Miscellaneous Income, Box 3 is reported as Other Income on Schedule 1 (Form 1040) Additional Income and Adjustments to Income, Line 8. The amount reported in Box 3 may be payments received as the beneficiary of a deceased employee, prizes, awards, taxable damages, Indian gaming profits, or payments from a former employer because you are serving in the Armed Forces or the National Guard for a period of 30 or fewer days.

Examples of Other Income which are not subject to self-employment tax are taxable distributions from an ESA or HSA, jury duty pay, and other taxable income from an activity not engaged in for profit. For more examples, please refer to IRS Instructions for Form 1040 and 1040-SR.

Conversely, if the income is from a trade or business, report the amount on Schedule C (Form 1040) Profit or Loss From Business (or Schedule F (Form 1040) Profit or Loss From Farming if the income relates to farming). The net profit calculated on Schedule C transfers to Schedule 1 (Form 1040), Line 3 and to Schedule SE (Form 1040) Self-Employment Tax for purposes of calculating self-employment (SE) taxes. The SE tax is reported on Schedule 2 (Form 1040) Additional Taxes, Line 4. You can also deduct one-half of your self-employment tax when figuring adjusted gross income.

This deduction is made automatically in the TaxAct® program on Schedule 1 (Form 1040), Line 14. Generally, the payer of the miscellaneous income does not withhold income tax or Social Security and Medicare taxes from the miscellaneous income. IRS Publication 334 Tax Guide for Small Business, has additional information regarding self-employment tax - what it is, who pays it, how it's calculated and reported, etc.

To enter or review the information for Form 1099-MISC, other income:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Form 1099-MISC in the Federal Quick Q&A Topics menu, click + Add Form 1099-MISC to create a new copy of the form, then continue until you reach the screen titled 1099-MISC: Enter information on form.
  3. Click the Switch to Form Entry (optional) link near the top to open the Quick Entry window, enter all of the applicable information from your Form 1099-MISC, then click Save & Close.
  4. Select the appropriate option to assign the Form 1099-MISC you are currently completing from the Assigned schedule or form drop-down, then click Continue.

Note. If you had selected an "Other Income" option, then on the screen titled What type of income was reported on this Form 1099-MISC?, click the appropriate button. If you click Other non-business income on the previous screen, then check I confirm that the income reported on this Form 1099-MISC is non-business income and is not subject to self-employment taxes to confirm that the income is non-business income and is not subject to self-employment taxes.

If you also have federal and/or state tax withholding reported, see Form 1099-MISC - Federal or State Withholding.

To enter federal and/or state withholding amounts reported to you on Form 1099-MISC, use the Q&A for Form 1099-MISC, Box 3. This will transfer the federal/state withholding to the appropriate line(s) of the returns. The actual Form 1099-MISC is not e-filed with the return, only the information that it contains. As instructed below, only the withholding entries are completed for the form and no amount would actually be entered for Box 3.

To enter or review the information for Form 1099-MISC, federal and/or state tax withholding:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Form 1099-MISC in the Federal Quick Q&A Topics menu, click + Add Form 1099-MISC to create a new copy of the form, then continue until you reach the screen titled 1099-MISC: Enter information on form.
  3. Click the Switch to Form Entry (optional) link near the top to open the Quick Entry window, enter all of the applicable information from your Form 1099-MISC, then click Save & Close.
  4. Select the appropriate option from the Assigned schedule or form drop-down to assign the Form 1099-MISC you are currently completing, then click Continue.

Note. If you have multiple amounts to enter you would combine them into one entry (one entry for the federal withheld amounts and one for the state withheld amounts).

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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