1099 Question

[econstudent]

I am working on my taxes for this year. My husband had a part time job as a personal respite worker for a special needs child, and he received a 1099-MISC form for this income. The income was reported in Box 7.

I am doing my taxes on TaxAct, and the only options they give me for 1099-MISC Box 7 is Schedule C for Business Profit or Loss or Schedule F for Farming Profit or Loss. This is not either of those, so I don't know what to do. This isn't a business he owns--he is contracted by a state agency. I thought maybe it should be put under a business because he is kind of an independent contractor, but then the tax software asks for a business name, and we don't have that...

Any ideas?

[bookcrazychick]

You will report this income on Schedule C. The business name would just be your husbands name.

[activeonlooker]

Was this just a one time thing for him? Or does he do it on a regular basis? Technically, it is self employment income. If this was a one time gig, I would put it on line 21 - other income - subject to SE tax and calculate the SE tax on schedule SE. Don't know how or if the tax software has the proper input for this. Perhaps someone familiar with the software can help.

[bookcrazychick]

Activeonlooker makes a good point. As our software doesn't recognize Line 21 as being subject to SE tax we just always put on Schedule C. Does your husband have any expenses to offset the 1099? If so, filing a Schedule C and deducting these expenses will be of benefit to do so.

[econstudent]

It's kind of an unusual situation. He's worked with the kid for a couple of years, but he usually got paid through the school district (as a regular W2 employee). Over the summer he worked with him as a tutor and was paid through the state agency. So to answer your question, I guess it was a one time thing.

Thanks for the input.

[econstudent]

Jan 23, 2011 21:21:51 GMT -5 bookcrazychick said:

Activeonlooker makes a good point. As our software doesn't recognize Line 21 as being subject to SE tax we just always put on Schedule C. Does your husband have any expenses to offset the 1099? If so, filing a Schedule C and deducting these expenses will be of benefit to do so.

No, no expenses...he just used his brain. Would there any problem with using Schedule C in this situation? The actual tax paid will be low to none because our overall income is low (we're college students), but I want to make sure I report it properly.

[econstudent]

ugh, this is confusing. For Schedule C, they want to know the accounting method (cash or accrual) and whether the business was started in 2010. I think that filing on paper would be easier so I could just put it on Line 21.

[TheOtherMe]

You will be able to use Sch. C-EZ since there are no expenses. Self employment tax would be applicable and Tax Act should calculate that for you.

I'm getting ready to issue 1099's for the place I work, as well as the W-2's.

[TheOtherMe]

You are on the cash basis of accounting and the business started in 2010. It's not hard.

It's going to ask for the business code and you can find that on irs.gov. Some type of personal services.

[Deleted]

He didn't have milage? (would that count in this case? ) Did he buy any books or anything? Paper, pens, such?

[TheOtherMe]

Did he go from one job to the next? That is needed to have mileage unless he has an office in the home.

[econstudent]

No, I don't think he can count mileage because it was the only job he worked during the summer, so there was no driving between jobs. The kid's mom bought everything they used for the tutoring so I don't think he has any deductible expenses.

Thanks for the help!

[econstudent]

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