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GeekWannaBe
Level 1

Does my son's work situation get him the Qualified Business Income deduction?

My son was issued a 1099 for being a church musician. Not all of the band members are paid for their services, but he is. There was no withholding, and he had no expenses. Is he eligible to receive the QBI deduction?
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DanielV01
Employee Tax Expert

Does my son's work situation get him the Qualified Business Income deduction?

It depends, but I would say likely not.  It can qualify for the QBI deduction if it is business income being reported on a Schedule C.  If he is a professional musician, and reports his income on Schedule C, his income could qualify for the QBI deduction. 

However, I think that your son's income fits the description of hobby income.  In other words, he is engaged in an activity in which he isn't really trying to make money, but makes some on occasion.  Hobby Income is not reported on Schedule C, but rather on line 16 of Schedule 1 (Form 1040).  While hobby income is not eligible for the QBI deduction, it is also not taxed by self-employment taxes (a 15% tax to withhold SS and Medicare taxes on earned income).  

Either way, follow the instructions in this FAQ to have the 1099-MISC correctly reported in TurboTax.  If he is self-employed, he can receive QBI, but he will pay self-employment tax on the income.  If hobby income, no QBI, but no SE tax.  Note the following: https://ttlc.intuit.com/replies/4770969

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2 Replies
DanielV01
Employee Tax Expert

Does my son's work situation get him the Qualified Business Income deduction?

It depends, but I would say likely not.  It can qualify for the QBI deduction if it is business income being reported on a Schedule C.  If he is a professional musician, and reports his income on Schedule C, his income could qualify for the QBI deduction. 

However, I think that your son's income fits the description of hobby income.  In other words, he is engaged in an activity in which he isn't really trying to make money, but makes some on occasion.  Hobby Income is not reported on Schedule C, but rather on line 16 of Schedule 1 (Form 1040).  While hobby income is not eligible for the QBI deduction, it is also not taxed by self-employment taxes (a 15% tax to withhold SS and Medicare taxes on earned income).  

Either way, follow the instructions in this FAQ to have the 1099-MISC correctly reported in TurboTax.  If he is self-employed, he can receive QBI, but he will pay self-employment tax on the income.  If hobby income, no QBI, but no SE tax.  Note the following: https://ttlc.intuit.com/replies/4770969

**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

GeekWannaBe
Level 1

Does my son's work situation get him the Qualified Business Income deduction?

Thank you TurboTaxDanielV
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