I am an elected official for a town board - how do I enter my 1099MISC without self employment?

[Ockham]

I receive a $1,000 stipend for being an elected official on my local water board of commissioners.  According to the IRS guidance for Tax Withholdings for Government Workers I should not be treating this as a self-employment situation.  How do I enter this into TurboTax?  I use Home and Business Edition and it keeps on trying to set up a Schedule C as if I'm self-employed.

[ColeenD3]

This income will be subject to Self Employment Tax if this income is earned in a similar capacity to your regular line of work and you expect to receive it in the future.

If this is income that has nothing to do with your normal job and that was a one time situation, then you do not have to pay Self Employment Tax on it.

When you enter Form 1099-MISC into TurboTax, the software will ask you questions regarding these two issues.

If you're not an employee of the payer, and you're not in a self-employed trade or business, you should report the income on line 8 of Schedule 1.

Please see this LINK for more information.

[Ockham]

Thank you for the response but per the link I referenced, I am not subject to self-employment as an elected official.  The elected office has nothing do with my regular job and meets all three standards set forth in the IRS definition of “public office” - it is a legislatively created position, is a government office, and has legislative authority.  It is additionally a one year term subject to re-election so the reoccurrence is uncertain.  That being said, is there a mechanism within turbotax that will enable me to avoid a schedule C for this?

[ThomasM125 · Accepted solution]

If you work through the questions after you enter your 1099-MISC form in TurboTax, it will apply the correct reporting based on your responses. However, you can enter the income manually as "other income" if you feel the program chose a schedule C reporting in error by following these instructions:

1. Go to the "Federal" section of TurboTax

2. Click on "Income and Expenses"

3. Find "Less Common Income" and choose the last entry "Miscellaneous Income"

4. On the next screen, "Miscellaneous Income" choose the last entry "Other Reportable Income"

5. Enter a description for your entry, and enter the taxable amount you want to exclude from income as a negative number

[gopack927]

You advise to enter the earnings as a “negative number” but where do you get that information to do so?  Since the earnings has not been reported, then the person is simply reducing the overall earnings w/o it having been reported in the first place.  I was agreeing with everything you said up until that final point about where and how you report the amount earned as an elected official.  

[LeonardS]

To enter your town board income without it being subject to self employment tax follow these steps

• With TurboTax open select  Wages & Income click on I'll choose what I work on  

• Scroll down to Less Common Income and select Miscellaneous Income, 1099-A, 1099-C  

• On the next page, select Other reportable income 

• On the page, Other Taxable Income enter Town Board income in the description.   

 This will put the income on Schedule 1 Line 8 of your  Form 1040.  You will pay state and federal income tax on the amount, but it will not be subject to self-employment tax.