My father is retired, but still receives income reported on 1099-MISC forms from commissions on insurance products he sold when he was working. He retired in 2009, and asks TurboTax if he did this work in '09-'10. When clicking "yes", TurboTax says he's self-employed.
I can get around this by saying it's "other income." A TurboTax window says "Various sources of other income share many of the same characteristics including" ... "little to no time allocated to the activity." This is clearly the case. He spends no (zero) time on the activity. The commissions come in so long as past clients pay their insurance premiums.
An IRS web page on self-employment ("Self-Employed Individuals Tax Center") says:
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Generally, you are self-employed if any of the following apply to you.
* You carry on a trade or business as a sole proprietor or an independent contractor.
* You are a member of a partnership that carries on a trade or business.
* You are otherwise in business for yourself (including a part-time business)
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I don't think any of these apply.
However, last year a professional accountant has prepared my father's taxes. He included a Schedule SE for self-employment. Looking back, I don't agree with this, and think my father could have justly received a refund.
Comments much appreciated.
