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Is interest earned on a sch C business subject to employment tax? 1099-INT has the business EIN. If not, where is it entered instead of Other Income on Schedule C?

 
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6 Replies
JohnW15
Intuit Alumni

Is interest earned on a sch C business subject to employment tax? 1099-INT has the business EIN. If not, where is it entered instead of Other Income on Schedule C?

Yes, it's subject to self-employment tax since it's income received by the business, and it's entered as Other Income on Schedule C..

Is interest earned on a sch C business subject to employment tax? 1099-INT has the business EIN. If not, where is it entered instead of Other Income on Schedule C?

Even if the interest was bank interest?  Just clarifying since I forgot to add that information in my question.
JohnW15
Intuit Alumni

Is interest earned on a sch C business subject to employment tax? 1099-INT has the business EIN. If not, where is it entered instead of Other Income on Schedule C?

Thank you for clarifying, it does make a difference and I should've asked.  Interest income from bank accounts isn't generally considered business income for a sole proprietor.  You should just report this as your personal interest income, on Schedule B.  Sorry if I misled you.

Is interest earned on a sch C business subject to employment tax? 1099-INT has the business EIN. If not, where is it entered instead of Other Income on Schedule C?

Thanks for the answer.  Sorry I didn't provide all the info at first.

Is interest earned on a sch C business subject to employment tax? 1099-INT has the business EIN. If not, where is it entered instead of Other Income on Schedule C?

He stated that the 1099-INT used the business EIN as the recipient's TIN.  Does it get reported on the schedule C?

AnnetteB6
Employee Tax Expert

Is interest earned on a sch C business subject to employment tax? 1099-INT has the business EIN. If not, where is it entered instead of Other Income on Schedule C?

If the interest being reported is bank account interest, then it would be reported on Schedule B regardless of whether the Form 1099-INT was issued in the business EIN or the sole proprietor's social security number.  There is no appropriate place on Schedule C to report bank account interest.  

 

The most important thing is that it will be reported on the tax return.  Keep some notes with your tax records and a copy of the Form 1099-INT in case the IRS questions where the income was reported.  

 

@buickmansfdt 

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