Host parents,how to report income?

[sasha51]

We have 15 years old International High school student who lived with us and we as Host parents have to
provide housing,food,transportation and many other things.We received monthly check-stipent what is not 1099. Do we need to report as income? Thanks

[IsabellaG]

Most agencies do issue 1099s for stipends paid to host families for exchange students, if it's a flat monthly amount as opposed to reimbursement for specific expenses. You should verify with the agency that they will not be sending a 1099.

If you're being reimbursed for specific expenses that you incurred because of your guest, and you had to account to the agency involved in order to be paid, then there is no income to report.

Flat monthly amounts with no accountability to the agency are not specifically excluded from tax, and they would normally be reported as Non Employee Compensation. You can, however, deduct your actual expenses from the stipend, and if your expenses are equal to your stipend, you would not owe any tax.

If your expenses were greater than the stipend, you may be able to claim a charitable deduction for your extra hosting expenses. See page 4 of the following link:

https://www.irs.gov/pub/irs-pdf/p526.pdf

[sasha51]

Our student placement agency not provide us with 1099 form,we have agriment to take care HS student with a food,everyday transportation to and from school, bedding,lundry and ets..We have flat rate check for that everymonth.
What we have to report and how? Thanks

[IsabellaG]

Since they paid you a flat amount/month and you didn't have to account for the expenses to get paid, if your expenses exceed your stipend, you may have a charitable deduction for the amount over the stipend. If your expenses were less than the stipend, you would have taxable income, and if they were equal, you would have nothing to report.

[Brittpdx1]

Thanks for that answer.  So, I receive a stipend and a 1099 reporting those amounts.  I’ve been paying taxes in all of it as other income.  How can I write off the expenses (which form - I don’t have a small business)?  I’d like to revise my previous returns if I can claim only the difference between the stiipend and my expenses as income!  Thanks.

[sikoragirl]

But this creates another problem.....if the agencies list the monies received "non-employee compensation" not only will families have to pay  income taxes on it, they will also have to pay Social Security on top of that, too, right? That doesn't seem fair.....considering these funds are received to care for a student (like foster care). Is there another way to categorize the income on the 1099 without using "Non-Employee Compensation" so that all that is paid is income tax?

Thanks!

~Sikora

[rfratice123]

Thanks for the information. How EXACTLY do you do this, using Turbo Tax online? I received a 1099-MISC and want to deduct expenses against it. Thanks.

[Brittpdx1]

Thank you for adding to the need for answers - I’ve been frustrated trying to get an answer for to such a seemingly narrow question.  I don’t want to have to pay for a full-blown CPA answer.

[SusanY1]

If you want to deduct expenses against the income, you will need to report it as non-employee compensation (a "business") rather than other income. It is likely that your 1099-MISC reports it this way by default (in Box 7) but you can treat it as if it is, even if it is reported in Box 3.

You will need to upgrade to TurboTax Self-employed to deduct the expenses if you are using the online version of TurboTax.  Once you have upgraded you will have the option to enter both the expenses and the income under the section Self-employment income and expense.  (If you are using an installed version on your computer, an upgrade is not likely necessary to report in this same area.)

Some of the questions may not fit exactly since we don't typically think of hosting a student as a "business" but do the best you can with them - it doesn't have to be perfect.  Keep in mind many of the TurboTax questions (such as what type of business, etc.) are to help set up the best interview for you and are not necessarily translated into direct entries on the tax return.  Be sure to review your tax return carefully before you file - you want to pay special attention to Schedule C to be sure the income and expenses are listed the way that you expect them to be.  

Many questions can be answered by clicking on the blue "Learn more" links throughout this section of the program but feel free, of course, to come back here with any specific questions as you have them. 

@rfratice123

@Brittpdx1