Question

If you got a 1099-MISC from TIKTOK, INC. and have $ earned in Royalties, does that mean you are self employed?

Forum|Forum|4 years ago
May 1, 2021
2 replies
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TurboTax Free Edition Online

No ... that means you have royalties to report on a Sch E ... follow the screen instructions in that part of the income tab.

Carl11_2

Assuming you're talking about the same thing and the 1099-MISC has the income reported in box 2 of that form, you have royalty income that gets reported on SCH E. You are not self-employed.

W

werty

My daughter has the same situation: a 1099-Misc from TikTok with a small $ in box 2 (Royality). TurboxTax asks her to choose whether to enter the income on Schedule C or Schedule E. If she chooses Schedule E, TurboTax thinks this is rental income and asks for property address. So it looks like she needs to choose schedule C, even though she does not have a business name or EIN. Is that correct?

D

DianeW777

@DianeW777

This seems like a flaw in TurboTax’s software. Their instructions state to not enter 1099-MISC info on Line 8 of Schedule 1. When entering 1099-MISC info, they should provide another option other than just Schedule C or Schedule D if there are amounts in Box 2.

This income was under my husband’s SSN since TikTok doesn’t allow minors to be paid. My son does not have a business - he does this as a hobby.

There is no flaw for this type of income. Answers to the questions is key, however hobby income is reported as indicated and you should have no reservation.

The answers to the questions make a difference on how it's reported. If you enter through the 1099-MISC, then there are specific questions that want to send it to Schedule C and possibly Schedule D. It's not clear what exactly was sold.

Personal Items: If sold at a gain go to sale of investments and not entered through the 1099-MISC section.

Hobby: Options to report under 1099-MISC as 'Other Income' or using the steps provided, however if you answer the following questions with a 'Yes' it will go to Schedule C for self employment.

It's important to answer the following questions 'No' if this is not self employment income.
- Did this involve work that's like my main job?
- No, for the question Did this involve an intent to earn money?

Box 2 is for royalty income. If this is a royalty, then it is reported on Schedule E. You would select the check box for Royalty investment income....., then a notation directing you back to select Rentals and Royalties to enter any appropriate expenses.

It is important for you to be clear on how to report the income. The Form 1099-MISC is used for many types of income, however your income is from a hobby. Here are steps to enter it as hobby income.

Other Miscellaneous Income:

Go to the Wages and Income section of TurboTax
Scroll to Less Common Income > Select Miscellaneous Income, 1099-A, 1099-C
Select Hobby or Other reportable Income > Enter a description (----) and the amount