Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted May 12, 2021 7:00:42 AM

I made 2,300 in W2 and 3500 in 1099-MISC. Why isn't the 1099-MISC number being included in my standard deduction? I'm a dependent.

0 4 194
4 Replies
Level 15
May 12, 2021 7:06:04 AM

The 1099-Misc income is unearned income.  A dependent's standard deduction is his earned income + $350; in your case 2300 + 350 = 2650.

 

If you got the 1099-Misc for working, you will have to report it as self employment to get it to be treated as earned income and that will mean about $495 in self employment tax (FICA - social security and medicare tax).  You'll get the bigger standard deduction, so the income tax (including any "kiddie tax') will be wiped out. 

New Member
May 12, 2021 7:40:54 AM

The 1099-MISC was for a college stipend.  It was not a job.

Level 15
May 12, 2021 7:52:43 AM

Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the  $12,400 filing requirement and the dependent standard deduction calculation (earned income + $350)..  It is not earned income for the kiddie tax other purposes (EIC. IRA contributions or additional child tax credit).

 

Taxable scholarship goes on line 1 of form 1040 with wage earned income.  TT can handle the dual treatment of the income.

 

Instead of entering it at the 1099-Misc screen, enter it at educational expenses.  After entering the 1098-T, you will be asked if you had any scholarships not reported on the 1098-T.  Enter there. When asked how much was used for room & board and other expenses, enter the 1099-Misc amount.  That makes it taxable. 

Level 15
May 12, 2021 7:58:39 AM