Insurance reimbursement

[remai010558]

My husband and I are insured through my work insurance.  He is retired but not yet 65, so his former employer sends him a 1099-Misc.  When I put that information onto Turbot Tax, it's says that he may be eligible for small business deductions (which is not the case) and then I get zapped for a lot of additional taxes.  

I am doing something wrong?  Should it be put in differently?

[JohnW222]

Why is your husband receiving Form 1099-MISC for his retirement?  Or, was this 1099-MISC for services your husband performed in 2019?  What was the occupation he had that he's receiving the 1099-MISC for? 

[JohnW222]

If your husband is a retired self-employed insurance agent, he probably owes self-employment tax that you’re seeing on your return.

 The IRS provides that

"Amounts received by current or former self-employed insurance agents and salespersons that are:

1. Paid after retirement but figured as a percentage of commissions received from the paying company before retirement,
2. Renewal commissions, or
3. Deferred commissions paid after retirement for sales made before retirement"

must be included in net earnings from self-employment. 

However, certain termination payments received by former insurance salespersons aren’t included in net earnings from self-employment.

Please see "Other Income and Losses Included in Net Earnings From Self-Employment" on page SE-4 of the IRS's 2019 Instructions for Schedule SE for more information.

[remai010558]

My husband worked for the Coachella Valley Water District and since he's not 65, they will continue to pay for retirees health insurance until they are 65.  Since he's insured through my employer under a family plan, the district will give him, as well as others the monthly stipend that they would have had to pay.

[KrisD15]

Delete the 1099-MISC and re-enter it as "OTHER INCOME 1099-MISC"

Click Federal

Click Wages & Income

Click “See All Income” if needed

Scroll down (PAST SELF-EMPLOYMENT) to “Other Common Income”

Click “Show more”

Scroll down to “Form 1099-MISC”

Click Start

Enter the 1099-MISC and Continue

On the “Describe the reason for this 1099-MISC” screen enter something like “Insurance Stipend” and Continue

Select “None of these apply” and Continue

Select “No, it didn’t involve work like main job” and continue through the interview selecting the appropriate answers for this stipend.

The amount from the 1099-MISC will be reported as Other income on the 1040 line 7a, not as Self-employment