1099-NEC and Schedule C Forms

[Markheinl]

Hello, my wife is a Marketing Consultant for a company she used to work for full-time and as of two years ago she receives a 1099-NEC for her wages. I dont remember doing this last year but this year TurboTax is directing me to complete a Schedule C Form as if my Wife owns a business. Is this something that needs completed? 

My wife does not have a business location/address, business name and etc... So i am alittle confused.

Thank you.

[LenaH]

Yes, a Schedule C needs to be completed. For tax purposes, self-employment income includes any part-time business or "side work" performed in which she is in business for herself, rather than another person. Although she is a consultant for a company she used to work for, she is technically no longer their employee. She is also considered self-employed and needs to file a Schedule C if she engages in business-like activities where she intends to make a profit. 

The business location/address would be your home address. The business name would be her name.

To set up your business on a Schedule C:

1. Open your return.
2. Search for schedule c and click the Jump to link in the search results.
3. Answer Yes to Did you have any self-employment income or expenses?
4. Follow the on-screen instructions.
5. On the page titled, Your consulting info, scroll to the bottom and click Looks Good.
6. Click on Form 1099-NEC on the page Let’s enter your consulting income.
7. Click continue.
8. Follow the on-screen instructions.
9. Enter any relevant expenses to your her consulting work. Some common examples would be automobile, communications and supplies.

For more information on entering business expenses, please see Where do I enter my self-employment business expenses, like home office, vehicle mileage, and suppli...

[Markheinl]

When filling out the Schedule C it asks about Accrual Methods, my wife is paid on a monthly basis for her consulting work. I am unsure which one this is categorized as?

Also my wife pays her federal taxes on her pay quarterly basis, i assume this should be still accounted for within the Deductions & Credits section?

[AliciaP1]

Since your wife's self-employment is not really tracking expenses and doesn't have a formal accounting method, you will choose cash as the method.  That just means that you report income when it is received ("cash" in the door) and what expenses you have when paid (cash goes out the door).

The quarterly taxes being paid are considered estimated taxes and should be reported as such.  You can follow these steps to enter the estimated tax payments:

1. With your return open, search for the term estimated tax payments
2. Select the Jump to link
3. Choose Start next to the type of estimated tax payment you'd like to enter
4. Enter the amount of estimated tax you paid at each of the quarterly due dates

[Markheinl]

Apologies for the numerous questions. Since my wife works from home as a consultant and is technically where  the "Business" is located.  Can we claim our Home Internet and Phone as a Business Expense since this is required for her to complete her work?

[PattiF]

Yes, you can claim home internet and phone as business expenses. You are also able to take a home office deduction if a designated area is solely used for your wife's work.

This link will aid in entering Business Expenses.

Here is a link to information about the Home Office deduction.