I DONT have a business, I worked ONE event and rec...
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kingdaviejones-y
New Member

I DONT have a business, I worked ONE event and received a 1099-Miscellaneous Income form why am I being asked information o a Sole Proprietorship?

I worked one event and received a 1099-Miscellaneous Income form. Why is TurboTax asking me to file out a Sole Proprietorship form and not allowing me to fill my tax return?
4 Replies
AnnetteB6
Employee Tax Expert

I DONT have a business, I worked ONE event and received a 1099-Miscellaneous Income form why am I being asked information o a Sole Proprietorship?

For that one event, you were performing services as an independent contractor.  In the eyes of the IRS that means that you are self-employed with your own business.  You will need to report your income and any expenses on Schedule C.  If your net income is above $400, then you will be subject to self-employment tax as well.

 

 

@kingdaviejones-y

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AmeliesUncle
Level 11

I DONT have a business, I worked ONE event and received a 1099-Miscellaneous Income form why am I being asked information o a Sole Proprietorship?

I disagree, a one-time event is not a business.

 

Somewhere in the program is way to indicate a 1099-MISC was not a business, but a one-time things, and it will report it as "other income".

 

However, if the 1099-MISC shows the income in Box 7, the IRS computers will be looking for a business.  If you don't report it as a business, you WILL receive an IRS notice.  You can respond to the IRS notice and explain the situation.  Or you can avoid the notice by reporting it as a business, then enter an equal amount as a business expense (resulting in $0 profit on the business).  Then report the income as "other" income as notice above.

BillM223
Employee Tax Expert

I DONT have a business, I worked ONE event and received a 1099-Miscellaneous Income form why am I being asked information o a Sole Proprietorship?

People should not get hung up on the word "business".

 

The IRS says "Self-employment tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners." See Self-Employment Tax.

 

When you do work at events like this (even just one), you are doing so either as an employee or as a contractor. In either case, Social Security and Medicare taxes must be collected.

 

In the case of the employee, the employer collects the money for Social Security and Medicare and sends to the IRS. In the case of a contractor, the contractor is responsible for determining and sending the Social Security and Medicare taxes (called collectively "self-employment taxes") to the IRS.

 

The mechanism through which this is done by a contractor on the tax return is Schedule C and Schedule SE, which are the same forms that sole-proprietors use.

 

So the IRS uses the terminology of the contractor having a "business". It would be a mistake to think that "I don't have a business so I won't file Schedule C or I will defeat the purpose of Schedule SE by artificially setting the Schedule C net income to zero."

 

There are many times where the IRS terminology is not the same as normal English, but it is clear what the IRS's intent is.

 

Please file the Schedule C and pay the SE taxes, if any are calculated.

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AmeliesUncle
Level 11

I DONT have a business, I worked ONE event and received a 1099-Miscellaneous Income form why am I being asked information o a Sole Proprietorship?


@BillM223 wrote:

 

When you do work at events like this (even just one), you are doing so either as an employee or as a contractor. In either case, Social Security and Medicare taxes must be collected.

 


 

Completely disagree.  For tax purposes, much of it based on Tax Court rulings, a "business" includes activity that is "regular" and "continuous".  

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