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moran0328
New Member

1099misc box 3 other income

My high school student received a 1099-misc form with $6479 in Box 3 (other income), for a part-time receptionist job, at a local nail salon, that she goes to after school. TurboTax says she owes over $1k in federal tax & I don't know how to answer the business questions on required Schedule C. Tax amount sound right? Have to fill out C?

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Accepted Solutions
PaulaM
Employee Tax Expert

1099misc box 3 other income

1099-MISC box 3 income is generally reported on line 21 of the 1040 as other income. Generally speaking, self-employment income on form 1099-MISC is reported in Box 7. Unfortunately, the nail salon is treating her as an independent contractor (self-employed), incorrectly in my opinion. 

If your daughter received income reported on a 1099-MISC, she may be treated as self-employed and that is reported on a Schedule C. Self-Employment  (SE) taxes are computed on her 'net income' from her business. There will be a deduction for 1/2 of the SE tax as an adjustment to her income that will make the taxes paid similar to what she would pay as an employee.

If you are claiming her as a dependent, then she loses her personal exemption. However, she still has her standard deduction.

Type 'schedule c' in the find box of her return and then select the 'jump to' link. Enter her 1099-MISC income under her business. Her SE tax is $915 but she should receive 1/2 deduction, making it $458 and lowering her adjusted gross income to around $6,021. Complete all other details and to calculate her total taxes (including her state taxes). 

https://ttlc.intuit.com/questions/1901402-do-i-need-to-file-my-own-taxes-if-i-m-a-dependent

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1 Reply
PaulaM
Employee Tax Expert

1099misc box 3 other income

1099-MISC box 3 income is generally reported on line 21 of the 1040 as other income. Generally speaking, self-employment income on form 1099-MISC is reported in Box 7. Unfortunately, the nail salon is treating her as an independent contractor (self-employed), incorrectly in my opinion. 

If your daughter received income reported on a 1099-MISC, she may be treated as self-employed and that is reported on a Schedule C. Self-Employment  (SE) taxes are computed on her 'net income' from her business. There will be a deduction for 1/2 of the SE tax as an adjustment to her income that will make the taxes paid similar to what she would pay as an employee.

If you are claiming her as a dependent, then she loses her personal exemption. However, she still has her standard deduction.

Type 'schedule c' in the find box of her return and then select the 'jump to' link. Enter her 1099-MISC income under her business. Her SE tax is $915 but she should receive 1/2 deduction, making it $458 and lowering her adjusted gross income to around $6,021. Complete all other details and to calculate her total taxes (including her state taxes). 

https://ttlc.intuit.com/questions/1901402-do-i-need-to-file-my-own-taxes-if-i-m-a-dependent

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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