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Form 1099-MISC

Tax Year 2013

 

Miscellaneous Income
If an individual or business organization makes a payment to an individual taxpayer in the course of a trade or business, under several circumstances, they are required to provide a Form 1099-MISC to that taxpayer.

 

How Income is Reported
How this income is reported in the return will depend on the transaction that occurred which yielded the payment. In some cases, the income will be treated as self-employment income and self-employment taxes will be due. Additionally, there may be business deductions taken against this income which reduce the taxable amount. The directions below explain how to enter this information correctly, and the proper amount of tax will be automatically calculated.

Directions
The following information explains the data entered into the taxpayer's Form 1099-MISC. A separate Form 1099-MISC worksheet is not used to input this information into the return file. Instead, the information from each box should be entered into the corresponding worksheet as indicated by the directions for each box. Some of the information is for the taxpayer's personal knowledge and will not be used to process the return.
Boxes 1 and 2 Rents and Royalties
Enter the amount on the Form 1099-MISC that represents income for rents from real estate on the Schedule E worksheet if the taxpayer was not in the real estate business.

 

Enter the amount on the Form 1099-MISC that represents income from rents from the taxpayer's real estate business on the Schedule C worksheet.

 

Enter the amount on the Form 1099-MISC that represents income from royalties on the Schedule E worksheet, unless the royalty income is from the sale of timber, coal, or iron ore. See IRS Pub. 544, Sales and Other Dispositions of Assets to determine the taxable nature of these assets.

Box 3 Other Income
Enter the amount received as an individual on line 21 of the Other Income worksheet and describe the payment.

 

Enter the amount received as business or trade income on the Schedule C or Schedule F worksheet, whichever is applicable.

 

For more information on the types of income that may be reported in this box, see IRS Pub. 525, Taxable and Nontaxable Income.

Box 4 Federal Income Tax Withheld
Enter the amount of federal income tax withheld under Additional Federal Income Tax Withheld on the Other Income worksheet.
Box 5 Fishing Boat Proceeds
Enter the amount received as a self-employed fisherman on the Schedule C worksheet as income.

See IRS Pub. 334, Tax Guide for Small Business for more details.

Box 6 Medical and Healthcare Payments
Enter the amount received as a self-employed physician or other healthcare provider on the Schedule C worksheet as income.

 

See IRS Pub. 334, Tax Guide for Small Business for more details.

Box 7

 

Nonemployee Compensation
Enter the amount received as a self-employed person on the Schedule C worksheet as income.

 

See IRS Pub. 334, Tax Guide for Small Business for more details.

 

 Important Note for Employees: If the taxpayer believes he or she is an employee, and the employer reported the taxpayer's wages on this line instead of a W-2, then the employer is treating the taxpayer as a self-employed person and not an employee. If the taxpayer believes this is in error and the employer will not correct the issue, report the amount from this box on line 7 of the Form 1040 and file IRS Form 8919, Uncollected Social Security and Medicare Tax on Wages with the tax return.

Box 8 Substitute Payments in Lieu of Dividends or Interest
Enter the amount received on the taxpayer's behalf by his or her broker on line 21 of the Other Income worksheet and describe the payment.
Box 9 Payer Made Direct Sales of $5000 or More
Enter the amount of income from the sale of consumer products on the Schedule C worksheet.

 

If this box is checked, it designates that the taxpayer was paid at least $5000 or more for the sale of consumer products on a buy-sell, deposit-commission, or other basis.

Box 10 Crop Insurance Proceeds
Enter amounts received as crop insurance proceeds on line 8a of the Schedule F worksheet.
Box 11 Foreign Tax Paid
Enter amounts paid that are deductible on Schedule A or can be claimed as a credit on Form 1116. See those worksheets or Pub. 514, Foreign Tax Credit for Individuals for details.
Box 12

Foreign Country or U.S. Possession
This is the foreign country or U.S. possession to whom the foreign tax reported above was paid.

Box 13 Excess Golden Parachute Payments
This income is subject to additional tax over and above ordinary income tax. This type of tax is not supported by this program.
Box 14 Gross Proceeds Paid to an Attorney
Enter the taxable portion of gross proceeds received as an attorney on the Schedule C worksheet.
Boxes 15a Section 409A Deferrals
This amount is not entered into the return, as it only reflects current year deferrals as a nonemployee under a nonqualified deferred compensation plan, plus any earnings on current and prior year deferrals.
Boxes 15b Section 409A Income
This income is subject to additional tax over and above ordinary income tax. This type of tax is not supported by this program.
Boxes 16 - 18 State Information
Report information specific to the state if applicable. State or local income tax withheld from the payments can be reported on Line 5 of the Schedule A worksheet. If the taxpayer is also filing a state return, report this amount on the appropriate line of the taxpayer's state worksheet.
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