There are many reasons you could have received a notice regarding your Form 1099-MISC Miscellaneous Income. 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 (Form 1040) Profit or Loss From Business (or Schedule F (Form 1040) Profit or Loss From Farming, if related to farming). Due to the nature of this income, the IRS generally assesses self-employment (Schedule SE (Form 1040) Self-Employment Tax) tax. If you incorrectly entered the income from this form on Schedule 1 (Form 1040) Additional Income and Adjustments to Income, 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 Schedule SE tax.
To review and/or modify your entries for Form 1099-MISC:
- From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
- Click Form 1099-MISC, 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.
- 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 to save your entries.
- Select the applicable "Schedule C" or "Form 1040/1040NR, Other Income" option from the Assigned schedule or form drop-down to assign the Form 1099-MISC you are currently completing, then click Continue.
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.