This year, TurboTax recognized the fact that some graduate students receive 1099-MISC forms for their fellowship income and does not force you into a self-employment trap. Great! Unfortunately, TurboTax does not report the income as fellowship income but rather “Other” income. If you follow the steps that TurboTax suggests for 1099-MISC fellowship income, 1) you’ll have to pay $35 to upgrade the software and 2) your income will be reported in line 21 of the 1040 instead of line 7 with “SCH” next to it.
If your 1099-MISC box 3 income is from a fellowship or training grant, you will need to enter the 1099-MISC information into TurboTax piecemeal to report it as a fellowship/scholarship. Entering your 1099-MISC information into TurboTax will take two general steps: 1) entering the income from Box 3 (step 1) and 2) entering the tax withheld from Boxes 4 and 16 (steps 2 to 4).
1. First, follow the steps for entering undocumented fellowship/scholarship income into TurboTax to enter the income reported in Box 3 of your 1099-MISC.
2. Go to the ‘Federal Taxes’ and ‘Deductions & Credits’ tabs. Click ‘Check for other tax breaks’ and ‘Jump to the full list.’ Next to ‘Estimates and Other Taxes Paid,’ click ‘Show more’ and then press ‘Start’ next to ‘Other Income Taxes.’
3. On the ‘Income taxes paid’ page, scroll down to ‘Other Income Taxes Paid in 2015’ and then press ‘Start’ next to ‘Withholding not already entered on a W-2 or 1099.’
4. Enter the tax withheld from Boxes 4 and 16 of your 1099-MISC into the first Other Withholding fields and press ‘Continue.’
Check: Under tabs ‘My Account’ and ‘Tools,’ click ‘View Tax Summary’ and then ‘Preview My 1040’ to verify that the income you entered was added to the correct line on your tax return.
Parent post: Grad Student TurboTax Guide: 2015 Edition
We at Personal Finance for PhDs are not tax professionals, and none of the content in this section should be taken as advice for tax purposes.
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