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Entering amounts from a Form 1099-MISC for an individual in Lacerte

SOLVEDby Intuit862Updated 1 week ago

Since Form 1099-MISC is used to report many different types of income, there's no one place in Lacerte to enter this source document. This article will help you determine where to enter different 1099-MISC amounts to report them appropriately on your clients' tax returns.

 

If you need assistance with entering Form 1099-NEC, refer to this article for more information.

Table of contents:

Rents or Royalties (box 1 or 2)
Other income (box 3)
Federal and state tax withheld (box 4, 15, 16, and 17)
Fishing boat proceeds (box 5)
Medical and Health Care Payments (box 6)
Payer made direct sales of $5,000 or more (box 7)
Substitute payments in lieu of dividends or interest (box 8)
Crop insurance proceeds (box 9)
Gross proceeds paid to an attorney (box 10)
Section 409A deferrals (box 12)
Excess golden parachute payments (box 13)
Nonqualified deferred compensation (box 14)

Rents or Royalties (box 1 or 2):

See Entering Rental and Royalty Income for an Individual Return (Schedule E).

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Other income (box 3):

  1. Go to Screen 14.1, SS Benefits, Alimony, Miscellaneous Inc.
  2. Scroll down to the Alimony and Other Income section.
  3. Enter the amount in Other income (Ctrl+E).

The amount will flow to Form 1040, Schedule 1, as other income.

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Federal and state tax withheld (box 4, 15, 16, and 17):

In order to claim tax withheld on 1099-MISC income, the IRS and most states require Lacerte to recreate a digital copy of the Form 1099-MISC your client received and include it in the e-filed return. The program uses your input in Form 1099-MISC/NEC for E-File Returns to meet this agency requirement, and to report withholding amounts on the appropriate federal or state return.

  1. Go to Screen 14.1, SS Benefits, Alimony, Miscellaneous Inc.
  2. Select the Add button on the left side of your screen to create a new 1099-MISC/NEC for e-file.
  3. Enter the Payer Information.
  4. Scroll down to the 1099-MISC subsection and enter the box 4 amount in (4) Federal income tax withheld.
  5. Enter amounts for any other fields that were completed on the 1099-MISC.
  6. Scroll down to the State Information section.
  7. Enter the box 16 amount in State tax withheld.
  8. Select the State from the drop-down menu.
  9. Enter the box 16 identifier in Payer's state no.
  10. Enter the box 17 amount in State income.

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 does 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.

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Fishing boat proceeds (box 5):

Should typically be included in gross receipts on Screen 16 Business Income (Sch C).

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Medical and Health Care Payments (box 6):

Typically for institutions (like insurance companies) to report payments to medical facilities. Certain health payments are subject to information reporting requirements and must be reported on a 1099-MISC. Lacerte doesn't have an input field for these payments, since they're not typically reported separately on the 1040.

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Payer made direct sales of $5,000 or more (box 7):

This is a reporting item for IRS purposes, and it's not typically included on the tax return. See the 1099-MISC instructions for more details.

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Substitute payments in lieu of dividends or interest (box 8):

Per the IRS instructions, "Shows substitute payments in lieu of dividends or tax-exempt interest received by your broker on your behalf as a result of a loan of your securities. Report on the Other income line of Form 1040."

  1. In Screen 14.1, Miscellaneous Income, click the SS Bene., Misc. Inc. link in the left navigation panel.
  2. Scroll down to the Alimony and Other Income section.
  3. Enter the amount and a description in Other income (Ctrl+E).

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Crop insurance proceeds (box 9):

Should be reported on Schedule F, line 6a and 6b, unless you're electing to defer the income to next year. See the Schedule F Instructions for more information.

  1. Go to Screen 19, Farm Income (Sch. F, 4835).
  2. Enter the amount in Total crop insurance proceeds received in 2023 to report it on Schedule F, line 6a.
    • If not deferring the income, also enter the amount in Taxable crop insurance proceeds received in 2023. No other entries are needed.
    • If you are electing to defer the income, leave the Taxable... field blank, and continue with the steps below to complete the election.
  3. In the General Information section of this screen, check the box for Crop insurance proceeds election.
  4. Go to Screen 46, Elections.
  5. From the Sections list, select Election to Defer Crop Insurance Proceeds and complete the information needed for the election statement.

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Gross proceeds paid to an attorney (box 10):

According to the 1099-MISC instructions, shows gross proceeds paid to an attorney in connection with legal services. Report only the taxable part as income on your return.

The program does not have a specific entry for this item.

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Section 409A deferrals (box 12):

Per the 1099-MISC instructions, this box "May show current year deferrals as a nonemployee under a nonqualified deferred compensation (NQDC) plan that is subject to the requirements of section 409A plus any earnings on current and prior year deferrals. This amount is also shown in box 1 of Form 1099-NEC".

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Excess golden parachute payments (box 13):

  • See the instructions for Form 1040 regarding tax on excess parachute payments.
  • Use Screen 45.3, Schedule J, Recapture, and from the Section list select Other Taxes. Enter the amount in the Excess Golden Parachute Payments from Form 1099-MISC field.

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Nonqualified deferred compensation (box 14):

Per Form 1099-MISC form instructions, "shows income as a non-employee under a non-qualified deferred compensation plan (NQDC) that does not meet the requirements of section 409A. This amount is also included in box 1, Form 1099-NEC as non-employee compensation. Any amount included in box 12 that is currently taxable is also included in this box. This income is also subject to a substantial additional tax to be reported on Form 1040."

Enter the amount from the 1099-NEC, box 1, on the Miscellaneous Income screen (Screen 14.1) in the Other Income (Ctrl+E) field. The income from the amount in box 14 is included in 1099-NEC, box 1.

However, the additional tax must be calculated and entered on the Schedule J, Recapture, Other Taxes screen (Screen 45.3), in the Other Taxes section under the heading Section 409A Tax.

Lacerte will calculate the additional tax if the NQDC income was entered on the Wages screen (box 12, Code Z). Since the income was reported on a 1099-NEC and 1099-MISC, you must manually calculate and enter the tax.

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