There are many reasons you could have received a notice regarding your Form 1099-MISC. The most common reasons are listed below:
- The form was never entered into the TaxAct program and the income was not reported elsewhere on the return.
- Entry error:
- Example of a transposed number: The number that should have been entered was $21,123; instead the user entered $12,123. This would have caused a difference of $9,000 in underreported taxable income.
- Example of an omitted number: The number that should have been entered was $21,123; instead the user entered $2,123. This would have caused a difference of $19,000 in underreported taxable income.
- The form imported from a previous year's tax return, but only the payer's information was transferred. The user did not enter the information for the current tax year.
- When entering a Form 1099-MISC with an amount in Box 7, the TaxAct program only allows you to report this income on Schedule C (or Schedule F, if related to farming). Due to the nature of this income, the IRS generally assesses self-employment (SE) tax. If you incorrectly entered the income from this form on Schedule 1 (Form 1040), Line 8 as Other Income, you may now owe SE tax on the income.
Note: Even if the income was reported to you in Box 3 as Other Income, you were responsible for making the final determination as to whether the income should have been subject to SE tax or not.
To review and/or modify your entries for Form 1099-MISC Miscellaneous Income:
- From within your TaxAct return (Online or Desktop), click the Federal header. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
- Click Form 1099-MISC
- Enter all of the applicable information from your Form 1099-MISC
- Assign the Form 1099-MISC you just entered to either Schedule C or Form 1040/Form1040NR, Other Income from the Assigned schedule or form drop-down list
- The program will proceed with the interview questions for you to enter or review the appropriate information