How do I add a 1099-misc without it charging self-employment taxes?

[billhalscheid]

my 16 year old son got a 1099-misc for working for an ice rink. He is not a sole proprietor, and it's not his "business".

[Hal_Al]

Schedule C is the correct place for that type of income.
Although it may be news to you that you “have a business” (and most of the other people who get their first 1099-MISC); The IRS considers anything in box 7 of 1099-MISC to be self employment income. Even for 16 year olds! Enter the 1099-Misc income, at Other Common income / income from a 1099-MISC . TurboTax (TT) will complete Schedule C or C-EZ for you and allow you to deduct any expenses associated with this income. You'll also have to pay self employment tax (social security & Medicare) on any profits greater than $400. These types of payments are frequently done this way. Your "employer" is not the only one.

[billhalscheid]

yep, gotcha.  I just thought because of his age and/or making so little money he would not pay taxes on it.  He's getting all of the taxes he paid on his W2 back, so why would this be different.

[Hal_Al]

It's different because it's a 1099-misc and not a W-2.  No social security and medicare (FICA) tax have been withheld. Since the "employer" didn't withhold/pay FICA tax the "contract employee/self employed person had to now do it.

[billhalscheid]

Hey, thanks for your responses. Much appreciated!

[Hal_Al]

First you need to decide if you are subject to self employment tax. Why did you get a 1099-misc? The IRS considers anything in box 7 of 1099-MISC to be self employment income. TurboTax (TT) aggressively steers you in that direction,even if the amount is in box 3. If you try reporting box 7 income as anything else, you chances of hearing from the IRS are very high. 

 That said, the key to getting TT to treat it as other income is to follow these steps: 

 Enter the 1099-Misc

 On the next screen Describe what the payment was for

 On the next screen select "none of these apply" 

On the next screen select "No it didn't involve work like my main job" 

On the next screen select "I got it in 2016" ONLY 

On the next screen select No, it didn't involve intent to earn money 

TT will put the amount on line 21 of form 1040 as other income See http://www.journalofaccountancy.com/Issues/2009/Jul/20091639.htm

[MichelleT]

You can't avoid claiming a 1099 Misc as self employed income because this is considered self employment by the IRS.

What to do with a 1099-MISC

As an independent contractor or freelancer, you report all earnings on your income tax return just like an employee does, but you do it in a different way. If your freelance work is sporadic and generally not your main source of income, then you can just include the payments in “other income” on the first page of your tax return.

If you work as an independent contractor for substantial periods during the year, then the IRS will treat you as self-employed. Self-employed taxpayers must report 1099-MISC income on a Schedule C attachment to their tax return.

In addition, you are also liable for Social Security and Medicare taxes, which you calculate on Schedule SE and attach to your return.

Advantages of receiving a 1099-MISC

There are some tax advantages to earning nonemployee income on a 1099-MISC. One benefit is that you have more freedom than an employee to claim deductions that relate to your profession.

https://turbotax.intuit.com/tax-tips/self-employment-taxes/what-is-the-irs-form-1099-misc/L4wLb4bej