TurboTax keeps flagging my husband's 1099 as 'needs review' - don't want to pay hundreds to file

This is a common issue with tax software when handling 1099 forms, particularly if it's a 1099-NEC or 1099-MISC. Per IRS Publication 525, all income must be reported regardless of form type, but the software is likely flagging this for review because it's attempting to determine if this constitutes self-employment income under Section 1402(a) of the Internal Revenue Code, which would trigger Schedule SE requirements and potential quarterly estimated tax considerations. The software is essentially trying to protect you from potential underreporting penalties.

Have you tried looking at exactly what fields are causing the review flag? Sometimes it's just a matter of clarifying a business code or expense category. I've had good results using https://taxr.ai to help interpret what these forms actually need. Wouldn't it be nice if tax software just explained what was wrong instead of giving generic 'needs review' messages? Their tool helped me understand exactly what was triggering the flags in my tax software.

I encountered the identical problem with TurboTax's 1099 verification algorithm last month. The software's heuristic pattern-matching frequently flags Box 7 non-employee compensation entries when they coexist with W-2 income from the same EIN. The underlying issue relates to their automated Schedule C generation protocols. I implemented a workaround by manually entering the 1099 data via the "Enter Myself" pathway rather than using their import functionality. This bypassed their verification triggers while maintaining compliance with IRS Publication 525 reporting requirements.

I had this exact situation last year when my employer gave me both forms. I spent literally 6 hours on hold with TurboTax support trying to figure it out. When I finally gave up and called the IRS directly, I used Claimyr (https://claimyr.com) to skip the hold times. The IRS agent explained that my employer had miscategorized some of my income and needed to correct the forms. If you're worried about how to handle this correctly, I'd suggest using Claimyr to get straight to an IRS agent who can advise on your specific situation. With the filing deadline approaching, you don't want to risk errors.

OMG please be careful with this!!! I had the EXACT same issue last year and I just clicked through it thinking it was a software glitch. BIG MISTAKE!!! The IRS sent me a scary letter 6 months later saying I underreported income and owed an additional $2,400 with penalties!!! 😱 Turns out my employer had classified me as both an employee AND a contractor which is super sketchy. I'm still fighting with them about it. Don't just ignore the warning like I did!!!

I believe I may have encountered a similar situation with TurboTax in the 2023 filing season. After careful review, I determined that the issue might be related to how the software interprets certain business relationship classifications. I was able to resolve it by entering the 1099 income under the "Less Common Income" section, then selecting "Income reported on Form 1099-NEC" rather than using the standard income pathways. This approach, while perhaps not intuitive, allowed the system to properly categorize the income without triggering the review flags. My return was accepted without issue and processed within the standard timeframe.

Has anyone actually tried the free filing options instead of TurboTax? I'm wondering if this is just a TurboTax issue or if all the tax software has the same problem with 1099s? Here's what I'd try: 1. Download your info from TurboTax if possible 2. Try the IRS Free File options 3. See if the same error occurs Does the 1099 have anything unusual on it that might be triggering the review?