topic 1099 MSC in Deductions & credits

1099 MSC

caldernv — Wed, 04 Mar 2020 00:18:57 GMT

Hi Not sure if I am using this section properly. My husband works in sales and receives a bonus for some appliances he sells. Do we have to claim them all or is there a minimum amount. Also, there is a section in the turbo tax asking me to include his business information but this is all from his job. Please help clarify as this is my first-time filing using the 1099- Misc .

Re: 1099 MSC

MinhT1 — Wed, 04 Mar 2020 00:35:48 GMT

Please read this TurboTax answer which addresses your question.

Re: 1099 MSC

Hal_Al — Wed, 04 Mar 2020 00:53:10 GMT

There is no minimum amount, all income is reportable.

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 (SET)(social security & Medicare) on any "profits" greater than $400.

That's the general answer. But, who is paying him this bonus? Is it his regular employer or is it the appliance manufacturer or vendor? Or somebody else.

If it's his employer, there is a way to cut the self employment tax in half (pay 7.5% instead of 15%) but it's apt to irritate your employer, as the IRS will go after him for the other half.

If the manufacturer paid this, it's known a a SPIFF and is not and subject SET. If this is the case, see https://ttlc.intuit.com/community/taxes/discussion/i-got-a-1099-misc-for-a-spiff-at-my-job-paid-by-the-product-supplier-now-it-is-having-me-file-as-a/00/511606 for instructions.

Re: 1099 MSC

Opus 17 — Wed, 04 Mar 2020 00:42:24 GMT

If the bonus is paid by the manufacturer and not his employer, it may not be self-employed income. I would have to look this up, but that would sound similar to the situation with car salesman and spiffs. If the bonus is paid by his regular W-2 employer, then it is supposed to be included on his W-2 income and the employer is filing their wage and tax reports incorrectly, probably to save money. There is a procedure in TurboTax to indicate that this money was paid by his employer and should have been included on his W-2. You might also want to think about going to work for a more ethical employer.