My wife received a 1009-MISC for $800 for assisting a High School Theater group with fitting costumes. She doesn't own a business and doesn't have any expenses. Do I have to create a fake business (Schedule C) for her in TT in addition to me entering her 1099-MISC into TT?
No. You can enter the 1099-MISC in TurboTax as "Other Common Income," which is reported on line 21 of the 1040 and will not generate Schedule C or SE tax. Please use the following steps in TurboTax CD/Download editions):
1. Click on Federal Taxes > Wages & Income > I'll choose what I work on.
2. Scroll down to the 1099-MISC and Other Common Income section.
3. Click on the Start/Revisit box next Form 1099-MISC. [See Screenshot #1, below.]
4. On the screen Did you get a 1099-MISC? click on the Yes button. [Screenshot #2]
5.
On the next screen, Let's get the info from your 1099-MISC, enter
the information from the 1099-MISC.
[Screenshot #3]
6. On the following screens, answer the following questions:
7. Continue through the rest of the interview screens. The income will appear on line 21 of form 1040 (Other Income).
This will determine the appropriate way to treat the income in your case (Hal_Al's method or mine).
No. You can enter the 1099-MISC in TurboTax as "Other Common Income," which is reported on line 21 of the 1040 and will not generate Schedule C or SE tax. Please use the following steps in TurboTax CD/Download editions):
1. Click on Federal Taxes > Wages & Income > I'll choose what I work on.
2. Scroll down to the 1099-MISC and Other Common Income section.
3. Click on the Start/Revisit box next Form 1099-MISC. [See Screenshot #1, below.]
4. On the screen Did you get a 1099-MISC? click on the Yes button. [Screenshot #2]
5.
On the next screen, Let's get the info from your 1099-MISC, enter
the information from the 1099-MISC.
[Screenshot #3]
6. On the following screens, answer the following questions:
7. Continue through the rest of the interview screens. The income will appear on line 21 of form 1040 (Other Income).
There is a "one time gig" exception to reporting box 7 of a 1099-Misc as self employment income. The activity you describe (assisting a High School Theater group with fitting costumes) certainly doesn't sound like self employment. But If you try reporting box 7 income as anything else, your chances of hearing from the IRS are high.
Yes.
Although it may be news to you that you “have a business” (and most of the other people who get their first 1099-MISC); The IRS considers anything in box 7 of 1099-MISC to be self employment income. Enter the 1099-Misc income, at Other Common income / income from a 1099-MISC . TurboTax (TT) will complete Schedule C or C-EZ for you and allow you to deduct any expenses associated with this income. You'll also have to pay self employment tax (social security & Medicare) on any profits greater than $400. These types of payments are frequently done this way. Your "employer" is not the only one.