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davekrause
New Member

"Is income reported on a 1099-MISC box 7 subject to Self Employ Tax? The income is due to my contract that would be pay 50% of my previous pay for my policy renewals.

 
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JohnW15
Intuit Alumni

"Is income reported on a 1099-MISC box 7 subject to Self Employ Tax? The income is due to my contract that would be pay 50% of my previous pay for my policy renewals.

Even though you're retired, this Form 1099-MISC income is treated as self-employment income, which is reported on Schedule C and is subject to self-employment tax.

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" in the IRS's Instructions for Schedule SE for more information.

[Edited 3|17|2020 10:31 am]

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1 Reply
JohnW15
Intuit Alumni

"Is income reported on a 1099-MISC box 7 subject to Self Employ Tax? The income is due to my contract that would be pay 50% of my previous pay for my policy renewals.

Even though you're retired, this Form 1099-MISC income is treated as self-employment income, which is reported on Schedule C and is subject to self-employment tax.

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" in the IRS's Instructions for Schedule SE for more information.

[Edited 3|17|2020 10:31 am]

View solution in original post

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