1099-MISC Research Study

[Help241]

Hello.  I participated in a medical research study and received a 1099-MISC Box 3.  It is over $1k.  I have never participated in a study before and do not do this for regular income.  I answered the questions accordingly.  The amount I received is appearing on 1040 Schedule 1, Line 8z. and impacted my taxes at my ordinary tax rate.  Is that correct?  For some reason I was thinking it would be taxed at 15%. 

(As a side note, at the end of entering this, it said something like--good news, we can look at business deductions later).

[CatinaT1]

Reporting it on Schedule 1, 8z is accurate. This is other income not subject to self-employment.

It sounds like you followed the correct way to enter it:

Income from a health study is 'Other Income' and is not subject to self-employment. The amount will be in box 3 of your 1099-Misc.

Take the following steps:   

1. Sign in to TurboTax Online, click  Continue your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer);  
2. Click on Federal Taxes at the top of the screen;  
3. Scroll down the page to the last section titled: 1099-Misc and Other Common Income;  
4. Select start or update next to the topic titled Income from Form 1099-Misc;  
5. Answer Yes, to the questions Did you get a 1099-Misc?; 
6. Enter the information from your 1099-Misc; 
7. Enter Medical Study for a reason for the 1099-Misc; 
8. For uncommon situations, select [Name] was in a research study and this was the payment; 
9. You will then be asked if you perform a service to earn the money, say No. 
10. If you entered this any other way, make sure to delete the other entries. 

[Help241]

Thank you for your response.  I believe I have entered everything as you have described.  Can you tell me if it is correct that it is calculating taxes at my overall tax rate and not 15%?  

[DaveF1006]

It is difficult to determine this without knowing the specifics of your return. You can easily check this out since you have the Home and Business Version of Turbo Tax.

• Go to the Forms Mode of your Program
• Find your 1040, then select it.
• Go to lines 15 and 16 on your 1040
• Divide Line 16 by line 15. This will indicate your tax rate based on your reportable income and should answer your question.

[Help241]

Thank you.  That is a lower rate than I'm seeing my research 1099-MISC calculate at.  I'm seeing my overall tax rate.  Is there anyplace else--any particular form or line number-- I should look to see if it may be calculating this research study payment at a higher rate than it should be?  I really believe I entered it correctly, but it's always possible something is off.

[DaveF1006]

It depends. Check line 23 if additional taxes were reported here. If so, you may have have been assessed a self-employment tax. 

@Help241 

[Help241]

That is zero, so that's encouraging.