1099 misc

[mike51696]

I received a bonus for going to training classes for my job. This was paid to me by another company. I know that I have to pay taxes on this, but when I enter it its being treated like I own a business and was paid this but really its just additional income how should I be entering it.

[DavidS127]

Yes, even though the payment you received for attending the training class for your work came from another company, it is considered earned income just like wages.  TurboTax will calculate the associated social security and Medicare taxes for this income. 

Enter your Form 1099-MISC using the path  Federal>>Income & Expenses>>Income from Form 1099-MISC and follow the instructions to enter your 1099-MISC "boxes" as they appear on the paper form.

[mike51696]

Thanks for the help. Do you know why its asking me for all kinds of info like she owns a business. It is also dropping her refund by 500 when it was only a 2000 bonus. I know she has to claim it but it looks like it is being taxed way more than it should. 

[mike51696]

I'm using turbo tax DLX to do this

[Opus 17]

What's the business and how does your spouse end up getting paid by company 2 when they are an employee of company 1?  (this isn't a spiff in auto sales, is it?)

[ColeenD3]

While it may not seem like you own your own business, for the purposes of the IRS, receiving your income in Box 7 of Form 1099-MIsc, you might as well have. 

The income must be reported on Schedule C, (unless it's a SPIFF) and you must pay social security and medicare taxes on the profit.

[mike51696]

on the 1099 misc the income is listed in box 3 as other income. does it still need to be shown on the schedule K line as well when it shows up there is when her refund amount drops and if not how do I get it to not show on that line as well as the 1099 misc line

[mike51696]

its a bonus for taking extra training in the child care feild

[KatrinaB48]

Since your 1099-misc income was reported in box 3 rather than box 7, you can report it as other income rather than self-employment income. The information above would have pertained if it were reported in box 7. In that case, it would have been reported as self-employment income. Please follow the directions below to enter your 1099-MISC form as other income:

1. Log in and open your return
2. Click the Federal tab (left side of screen)
3. Click the Wages & Income tab
4. Scroll down to Other Common Income
5. Click Start/Revisit Form 1099-MISC
6. Enter the information from Form 1099-MISC and answer the interview questions to report this income.

[Opus 17 · Accepted solution]

Box 3 income will usually only be taxed as “other income” and not be taxed as self-employment income.  The difference is that with other income, you can’t deduct expenses; with self-employment income, you need a schedule C and you pay an extra 15% self-employment tax.

For box 3 income to end up as self-employment in TurboTax, you must have answered the testing questions in such a way as to make the program think this was work income. The program asks questions like,  did you intend to earn a profit?  Is this work similar to your normal work? Will you perform this work in the future?

you need to answer “no“ to these testing questions. The course was not taken to earn a profit, and a bonus for taking a training class is not the same as her usual profession of caring for children.  If you delete the 1099, and then re-enter it, and answer all the testing questions as no, that should result in the income being listed as other income and not self-employment income.