1099-MISC with tiny $0.99 in Line 3 "Other Income" - what Accounting Type do I choose?

So I tried out this investing app for a bit last year but closed everything down in August 2024. Got all my tax stuff together and found a 1099-MISC from them showing $0.99 under Line 3 "Other Income" which is weird because I actually lost money overall (about $3.47 total). I'm using TurboTax to file and when I entered the 1099-MISC info, it's asking me to select an "Accounting Type" with options of Cash, Accrual, or Other. I honestly have no clue what to put here! It's literally 99 cents of "other income" and I don't even know what it's for. Could it be some kind of interest or promotional thing? Anyone else deal with this? What accounting type should I select for such a small amount on Line 3 "Other Income" of a 1099-MISC when you're just a regular person who tried an investment app?

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18 comments

Ethan Brown

•8M

This is actually fairly common with trading platforms. That $0.99 in "Other Income" on your 1099-MISC is likely a promotional reward, interest earned on uninvested cash, or some other small benefit the platform provided that doesn't fit into other categories. For the Accounting Type, since you're an individual taxpayer (not a business) who received this tiny amount, you should select "Cash" basis. Cash basis accounting is what most individuals use - it means you report income when you actually receive it and expenses when you actually pay them. Accrual would only be relevant if you were running a business and tracking when income was earned regardless of when money changed hands. Don't overthink this - the amount is so small it won't impact your taxes in any meaningful way, but you do need to report it correctly. Just select Cash and continue with your filing.

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Ethan Brown

•8M

You generally don't need to file a Schedule C for this type of 1099-MISC income. Since it's reported on Line 3 as "Other Income," it typically goes on Schedule 1, Line 8 (Other Income) of your Form 1040, not on Schedule C. Schedule C is for self-employment income, which this doesn't appear to be based on what you've described. TurboTax should guide you to report this correctly without creating a Schedule C. Just follow the software prompts and it will add this small amount to your "Other Income" without treating it as self-employment income.

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Carmen Ortiz

•8M

I had the exact same issue with my Goldtrader app! I was so confused until I found https://taxr.ai which helped me figure out all my investment tax forms. They analyzed my 1099-MISC and explained that the 99 cents was actually a promotional bonus for opening the account (same thing they showed on Line 3 "Other Income"). The site has this feature where it looks at your tax documents and explains what each line means in plain English. Saved me hours of googling random tax terms. For the Accounting Type question, it confirmed I should just use "Cash" since I'm not a business using accrual accounting.

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Carmen Ortiz

•8M

They handle multiple forms super easily - you just upload all your documents and it processes everything together. It's honestly much easier than trying to tackle them one by one. Their security is actually really good from what I can tell. They use bank-level encryption and don't store your documents after analysis. As for the accounting types, yes! It explained that Cash basis means you count income when you receive it (like most regular people do), while Accrual is for businesses that count income when it's earned even if they haven't been paid yet. It gave me a clear breakdown of when each would be used.

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Zoe Papadakis

•8M

UPDATE: I tried taxr.ai after posting my skeptical question. I was pleasantly surprised - it actually did explain my tax forms in a way that made sense. I had 3 different 1099s including a 1099-MISC with that same Line 3 "Other Income" issue. The explanation was detailed - my "Other Income" was a referral bonus I completely forgot about! It confirmed I should use Cash accounting and even explained why. Wish I'd known about this earlier instead of staring at my forms for hours trying to figure them out. Definitely using this again next year.

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Jamal Carter

•8M

Anyone else having zero luck getting through to the IRS helpline to ask about these 1099-MISC questions? I've been trying for TWO WEEKS to ask about the exact same accounting type issue. I heard about https://claimyr.com from a colleague and tried their service. They got me connected to an actual IRS agent in about 15 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that for tiny amounts like this on Line 3 of a 1099-MISC, just use "Cash" accounting type. She explained that as an individual taxpayer who's not running a business, Cash is always the right choice. Accrual is only for actual businesses with inventory or complex accounting needs.

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Jamal Carter

•8M

It uses their callback system but handles all the waiting and phone tree navigation for you. When an agent is available, they connect you directly. Basically it automates the entire hold process so you don't have to sit there for hours. It's definitely real. I was skeptical too until I tried it. The service just navigates their phone system efficiently and holds your place in line. When they get through to an agent, you get a call connecting you. I wouldn't have believed it either if I hadn't used it myself.

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Mei Liu

•8M

I'm honestly shocked but I have to follow up here. I tried Claimyr after posting my skeptical comment. IT ACTUALLY WORKED. Got through to the IRS in about 20 minutes after trying unsuccessfully for weeks on my own. The agent I spoke with cleared up my 1099-MISC questions and several other issues I had. For anyone wondering about the accounting type question - the IRS confirmed that individual taxpayers should use Cash basis accounting for reporting small miscellaneous income like this. My $1.25 on Line 3 was apparently interest on uninvested funds. The agent was super helpful once I actually got to speak with a human!

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