1099-NEC Entries

[CJ_SFS]

I know there's an article written by ProConnect about this, and I've read it. I just need to confirm that I'm not adding information into the system twice. It makes no sense to me.

I have a client with multiple 1099-NEC's. I was under the assumption that I need to enter in the 1099-NEC's on the "1099-MISC/NEC" page in ProConnect and I was good to go. But those amounts aren't flowing to the 1040. Do I need to add them again to Sch C even though I already added them in the Misc. Income screen? If so, why wouldn't ProConnect just make it flow automatically? It's extremely confusing.

If I add them in the Misc. Income AND Sch C, they owe over $19k on Federal. Their total 1099-NEC's amount to aproximately $86k.

Thanks for any help on this.

[PhoebeRoberts · Accepted solution]

"I was under the assumption that I need to enter in the 1099-NEC's on the "1099-MISC/NEC" page in ProConnect and I was good to go."

Does ProConnect not have a note like Lacerte does, that says "only enter your 1099-NEC here if you have withholding from this handful of states"? That screen is strictly for state efile compliance.

Prepare your Schedule C using the Schedule C input. Report all your client's income, whether they got a 1099 for it or not. SE tax adds up quick!

[CJ_SFS]

It's similar to that. It states "Income amounts and foreign tax paid, however, do not carry to the tax return and must be entered in the respective input screen to which the income or credit applies (i.e. Schedules. C, E, F, or the SS Ben./Misc. Income screen)."

I just wanted confirmation since it seems like it would be really easy for ProConnect to just add a drop down option for the Schedule to attach it to instead of entering the info in two different places. Thanks for the confirmation!

[itonewbie]

This is the article you're looking for. 

https://proconnect.intuit.com/support/en-us/help-article/form-1099-misc/enter-amounts-1099-misc/L9JQ...

Here's the excerpt that is particularly important:

Important: Income amounts entered on this screen will not flow to the tax returns. You must follow the steps for the other box amounts you received in this article in addition to completing this screen when withholding is present.

However, federal and state tax withheld entered on this screen do flow to the appropriate line of the tax return (Form 1040, line 25b, for federal amounts). This withholding should not be duplicated or re-entered anywhere else in the tax return.

If your client has one or more 1099-K, have a ball reconciling the revenue to make sure there's no duplication or omission.

[qbteachmt]

A business return needs to include everything for that business.

Getting a 1099-NEC or not, has nothing to do with it.

Getting 1099-K has nothing to do with it, either.

1099-NEC is issued by your client's customers when that customer, as part of being in business, had your taxpayer do something "business-like" for them and it reaches $600 or more in the calendar year, so they report to the IRS that your client is "in business" and the IRS now knows to expect a tax return from your client.

1099-K is issued because of the movement of money. That doesn't make it business, or any part of it business, but it also is possible all of it was business.

So, your client could have grossed $3 million in business that year, but if no one client paid $600 or more, they would never see a 1099-NEC. And, if they only paid in cash or checks, there would never be any 1099-K, either.

That's why the business records everything for the business that happens in the business, and that is the data you use for the tax return. If you are handed multiple 1099-NEC, add them up. Your client had better be reporting at least that much in Gross.