topic Re: Filing a 1099-MISC in Get your taxes done using TurboTax

Filing a 1099-MISC

zerobvt — Tue, 04 Feb 2020 18:17:49 GMT

My son received a 1099-MISC for a part-time job.....box 7 filled in with the amount of #1616.25.

when Turbo Tax reviewed the federal form, this 1099-MISC was placed on a Schedule C Profit or Loss from Business and wrote my son down as the profiteer/owner. My son does not/did not own the business...he was just a temporary seasonal employee. How can this be changed?

Re: Filing a 1099-MISC

Bsch4477 — Tue, 04 Feb 2020 18:34:27 GMT

Your son was hired as an independent contractor and not as an employee so he has to file a return and complete Sch C. He will owe self employment tax on that income which goes toward his social security and Medicare. He should be sure to check the box saying that he can be claimed by someone else.

Re: Filing a 1099-MISC

Irene2805 — Tue, 04 Feb 2020 18:39:29 GMT

Since your son received a 1099-MISC instead of a W-2 he is considered an "independent contractor" and not an employee.

Form 1099-MISC is a catchall tax form—the "MISC" in 1099-MISC stands for miscellaneous. Income from form 1099-MISC is most commonly reported on Schedule C--the form for reporting self-employment income and expenses.

Please see this TurboTax Help article for an explanation of self-employment income as well as when you are not considered self-employed: Am I considered self-employed?

When you’re paid this way, there’s no withholding taken out of your income, which means you’ll pay both self-employment tax as well as income tax. But being self-employed enables you to have lots of write-offs as well, so make sure to enter all your expenses. This helps you reduce the taxes you might owe or increase your refund. We’ll help you get every possible tax break you deserve.

Re: Filing a 1099-MISC

zerobvt — Tue, 04 Feb 2020 20:26:47 GMT

Thank you for your quick response. More questions about completing Schedule C:

1) How do I know if this activity is a qualified trade or business under Section 199A?

2) Where do I find the principal business code for questions B?

3) Is the employer EIN the same as Payer's TIN?

4) How do I know the accounting method 1) cash 2) Accrual 3) Other specify

5) Question G: What does it mean "materially participate"

6) Part 1 Income 1a I don't know other gross receipts not reported on the 1009-MISC

Re: Filing a 1099-MISC

zerobvt — Tue, 04 Feb 2020 20:32:44 GMT

My son is 40 years old. His total income for last year was $5318.75. I was originally going to claim him as a dependent because I fully supported him and he lives at home, but this 1099-MISC arrived which put his income over the $4,200 limit. ..and no, my son is not disabled. So, according to your last suggestion, he can't be claimed as a dependent by someone else.

Re: Filing a 1099-MISC

DaveF1006 — Tue, 04 Feb 2020 20:44:33 GMT

From what you have just said, I suggest that he file his own tax return claiming his own dependency. He can't be claimed by anybody with that amount of earned income in 2019.

Re: Filing a 1099-MISC

Bsch4477 — Wed, 05 Feb 2020 01:25:42 GMT

At the end of this pub you will see business codes. Don’t worry if nothing matches exactly what he did. Pick the closest description.

https://www.irs.gov/pub/irs-prior/i1040sc--2018.pdf

Very few businesses do not qualify for QBI so I think it’s safe to say his qualifies

He materially participates and is on a cash basis.

Yes, employer EIN is the same.

There are no other gross receipts so add nothing to the 1099-misc income.