Form 1099-MISC - Errors That Could Prompt a Notice
There are many reasons you could have received a notice regarding your Form(s) 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.
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 Form 1040, Line 21 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 on the Federal tab. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
Click Form 1099-MISC to expand the category and then click the appropriate box number from your paper copy of Form 1099-MISC
If applicable, choose the form or schedule on which the income is to be reported and click Continue
The program will proceed with the interview questions for you to enter or review the appropriate information