How to admend my 2018 taxes for my College.

[rjs]

Did someone in the college financial aid office tell you that there is something wrong with your 2018 tax return, so you have to amend it? Before you amend your tax return, make sure that you really have to amend it. It's very common for college financial aid offices to say that your tax return is wrong when there is really nothing wrong with it. There is a surprising amount of ignorance and misinformation about tax returns in financial aid offices. What exactly did they say is wrong with your tax return, and why do they think it's wrong?

[dferr42]

Hi thanks for answering my question; yes they said that I was chosen for verification and that I needed to get the wage and income transcript from the IRS. After getting that document they said it didn’t amount to the other (HSH) 12000 that I Made cleaning houses and that my W2 was only 5339. They said my taxes was done wrong and they will disburse my financial aid they’ve held for 2 terms now bc of me needing to complete a 1040x. 

[Critter-3]

Sounds like you may have messed up and entered the HSH as wages and not self employment ... see the info here : 

You are probably considered SELF EMPLOYED as you are working in the business with multiple clients. Household Employee is really a term for someone doing this casually and not in the business.

If you want to enter as Household Employee:

In TurboTax, enter Household Employee wages at:

 Federal Taxes , Click on Wages and Income, Click “I’ll choose what I work on”, Scroll down to Less Common Income,On Miscellaneous Income, 1099-A, 1099-C click the start button, On the next screen click the start button on Other Income not already reported on Form W-2 or Form 1099. Answer Yes on the next screen and complete the interview.

 TurboTax puts the amount on line  the wages  with the notation “HSH”. It is considered earned income. 

The IRS has been investigating HSH income since it may avoids social security tax, it's undocumented qualifying income for the refundable credits. Make sure you have excellent records of where you work and who you work for. The IRS deems someone working as you are normally SELF EMPLOYED since you are in the business with multiple clients.

If no single employer paid you more than the statutory limit, they are not required to withhold taxes. 

If you claim them as HSH the Household employee wages  were from more than one employer and no single employer paid your more than the limits, you MAY be able to avoid the social security tax . But, you will also not get credit for these wages with the Social Security Administration, for future benefits.  You should speak with a tax advisor if you choose not to report this amount as SE income.

SUGGESTED METHOD: Report as Self Employment income

You will need TT Self Employed these wages on schedule C, paying your own social security tax In TT go to Federal Taxes tab, choose Wages & Income, choose “I’ll choose what I work on”, Scroll down to: Business Items and select   - Business Income & Expenses (Sch C).

You can than deduct your cleaning supplies and mileage and other expenses.

IRS guidance for self employed:

https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

See this TurboTax FAQ for help with amending.

[rjs]

Your tax return is correct. I don't agree with Critter-3 that you were self-employed, i.e. running your own housecleaning business. You were a household employee, but you worked for several different employers (homeowners) and they did not give you W-2s. An individual household employer is not required to give you a W-2 unless they paid you $2,100 or more (for 2018) for the year. If you worked for a number of different homeowners, it's quite possible that you made $12,000, but no one homeowner paid you $2,100 or more for the year.

HSH on your tax return indicates money you earned as a household employee for which the employers did not give you a W-2. Since the employers did not issue W-2s, the income would not show up on the Wage and Income Transcript from the IRS. The Wage and Income Transcript does not list all your income. It only lists income that was reported to the IRS on tax reporting documents, such as W-2s, that are filed by employers or other payers. If there is no reporting document, the payment is not shown on the Wage and Income Transcript.

Here's a description of the Wage and Income Transcript from the IRS web site.

"Wage and Income Transcript - shows data from information returns we receive such as Forms W-2, 1099, 1098 and Form 5498, IRA Contribution Information."

The IRS instructions for line 1 of Form 1040 say the following. "If you received wages as a household employee and you didn't receive a Form W-2 because an employer paid you less than $2,100 in 2018, enter "HSH" and the amount not reported to you on a Form W-2 in the space to the left of line 1."

You will have to try to explain it to the financial aid people. If necessary, ask to speak to someone higher up. You can show them the IRS instructions. (It's on page 26 of the 2018 IRS instructions for Form 1040, which you can download from https://www.irs.gov/pub/irs-prior/i1040gi--2018.pdf .) If they are telling you omit the income that is not on the Wage and Income Transcript, they are effectively telling you to make your tax return fraudulent by not reporting all your income. You earned the money, and you have to report it. As I said earlier, there is a surprising amount of ignorance about tax returns in financial aid offices.

[Critter-3]

The return may or may not be correct ... the poster needs to determine that and either amend the return OR explain it to the college.  Only they know the facts of the case which is why my answer mentioned both options.