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Level 2
June 3, 2019
Solved

I got a 1099-misc from my employer as an incentive payment for a patent award. When I try to claim it, turbo tax thinks its self employment. how do I claim this?

  • June 3, 2019
  • 1 reply
  • 26 views

im trying to figure out how this should be claimed, I wasn't self employed, it was just incentive money. turbo tax wont let me get past the federal review for some reason

Best answer by Hal_Al

It's compensation/earned income and as such social security & medicare ( FICA) tax needs to be paid. There are two ways of handling it:

1. Report it as self employment and pay both the employer and employee half of FICA as self employment tax.

2. Report it as additional compensation and pay the employee half of FICA on for 8919. The IRS will go after your employer for the other half.

For #2, In TurboTax (TT), enter at:

- Federal Taxes tab

 - Wages & Income

   - 1099-Misc and Other Common Income

      -Income from Form 1099-Misc

When asked why you got the 1099-Misc,type in Patent Bonus from Employer

On the next screen where it asks "Do one of these uncommon situations apply", select "My employer reported this extra money on a 1099-Misc but it should have been reported on a W-2.

On the next screen Titled "Filing form 8919", select the same answer.  Follow the rest of the interview. TT will prepare form 8919 for you to pay your share of FICA. It will add the income to line 1 of for 1040, with the notation F8919.

1 reply

Hal_Al
Level 15
Hal_AlLevel 15Answer
Level 15
June 3, 2019

It's compensation/earned income and as such social security & medicare ( FICA) tax needs to be paid. There are two ways of handling it:

1. Report it as self employment and pay both the employer and employee half of FICA as self employment tax.

2. Report it as additional compensation and pay the employee half of FICA on for 8919. The IRS will go after your employer for the other half.

For #2, In TurboTax (TT), enter at:

- Federal Taxes tab

 - Wages & Income

   - 1099-Misc and Other Common Income

      -Income from Form 1099-Misc

When asked why you got the 1099-Misc,type in Patent Bonus from Employer

On the next screen where it asks "Do one of these uncommon situations apply", select "My employer reported this extra money on a 1099-Misc but it should have been reported on a W-2.

On the next screen Titled "Filing form 8919", select the same answer.  Follow the rest of the interview. TT will prepare form 8919 for you to pay your share of FICA. It will add the income to line 1 of for 1040, with the notation F8919.