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What TurboTax software do I need to do this?
If you are reporting stipend income, in the Education section of Deductions & Credits, you can use any version of TurboTax (even the Free edition).
[Edited | 3/25/2021 1:23 pm PDT]
So If you are performing any duties in conjunction with the stipend, can you deduct housing, food, etc as business expenses on a Schedule since the fellowship was out of town?
No, you can not deduct housing, food, etc. as a business expense on a schedule. A stipend is a fixed amount of money provided to people pursuing unpaid work to help offset expenses such as housing and food.
@Marka81
Then how do you record it? It was issued on 1099NEC with box 1 which is "non employee compensation.' which should be followed by a Schedule C. It was not issued as 1099 MISC other income or a W-2. And I know stipend payments are at least taxable in terms of PIT.
It depends. If you are performing any duties in conjunction with the stipend (e.g. teaching assistant, research assistant, student-teacher, clerical work, etc.), then the payment is considered self-employment income, which is reported on a Schedule C and subject to both income tax and self-employment taxes. If you are not performing any duties in conjunction with the stipend, it can be classified as Other Income.
If you want to enter your 1099-NEC and have it flow to a Schedule C, please follow the instructions below:
If you want to enter your 1099-NEC and have it flow to Other Income (and not be classified as self-employed), please follow the instructions below:
The negative number is coming up as line 8 on our 1040, not line 21. Is that correct?
Yes, prior to TCJA, other income was entered on Line 21. It is now Line 8, 1040.
The original post in this thread provides instructions for reporting a 1099-MISC for a stipend.
My son has received a stipend for summer internship/research at a university which is different from the one which he attends during the school year, reported on form 1099-MISC box 3.
I am filing a separate tax return for him and using the instructions provided in this thread to enter the amount such that it will be listed as "Other income" (and not self-employment).
At this point, TurboTax calculates a hefty amount of Federal & State taxes. The instructions proceed to explain that I should make the entire amount non-taxable by entering it as a negative number in a separate box.
"Please be sure to write a short explanation and enter the amount as a negative number. At this point, the form 1040 will show full amount as taxable AND as a negative adjustment on line 21"
Tax amount is reduced to zero, but I can't find any websites that could confirm the legality of this strategy.
Can you please confirm that a stipend for an undergraduate summer internship/research at a university which is different from the one that the student attends during the school year, reported on form 1099-MISC box 3 for tax year 2022, is non-taxable?
Can you please confirm that a stipend for an undergraduate summer internship/research at a university which is different from the one that the student attends during the school year, reported on form 1099-MISC box 3 for tax year 2022, is non-taxable? A stipend received from an institution where he is not a student is taxable income.
"You must include in gross income:
If you receive a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free. Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions:
So you are correct in entering the stipend as "Other income" , however, do not follow the rest of the instructions to remove it from taxable income. This income is subject to federal taxes and potentially state and local taxes depending on the state you live in.
To enter this income, you will take the following steps only:
This will put it on line 8z of your schedule 1 as other income.
Thank you for the detailed explanation!!!
Since a $4000 stipend for my son's undergraduate summer internship/research was at a different university from the one that he attends during the school year, and was reported on form 1099-MISC box 3, it gets hit with the kiddie tax, which for this particular case amounts to ~$500 federal tax + ~$200 state tax.
Yet, if the stipend income would be reported on a W2, the amount of tax would be zero. It's unfortunate that the tax code doesn't have a provision to remedy this situation.
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