graduate stipend 1099-misc

[seoheekim]

Hi, 

As a graduate student, I have been both non-comp and comp worker in 2019 so I have both W-2 form and 1099-MISC. For both incomes, I have a lot of amount for federal income tax withheld and state tax withheld. 

Following the advice on putting fellowship information on Deductions and Credits section other than 1099 - MISC, I found that the amount that I am getting back has decreased. I believe that the amount must increase as I have tax already withheld on my 1099 MISC income, but there was not an area that makes me record the amount of tax withheld.

Would you help?

[MarilynG1]

No, you must enter your 1099-Misc as Income.  Type '1099misc' in the Search area, then click on 'Jump to 1099misc'.

Follow the prompts in TurtboTax to indicate the type of income (stipend).  

You are able to enter any Taxes Paid on the entry screens for both W-2 and 1099-Misc.   On the 1099-Misc, check the box 'My form has other info in Box 1-18' to open the entry area for Tax Paid. 

If you expect to continue receiving this income, you can report it as Self-Employment Income on Schedule C and deduct Expenses against it. 

If you will not continue receiving the income, click the link for instructions on how to report it as Other Taxable Income.

[seohee]

Thank you for your reply:

I still see a lot of posts that for the graduate fellowship, I must not use 1099 MISC but rather other income, as I am not self-employed. Also, if I put the amount in 1099 MISC, the IRS will charge me double the tax as self-employer is required to do so. 

So my question is: I am sure that my tax withheld are fully refundable but the amount decreases as I type my amount into 1099 MISC. What should I do?

[MarilynG1]

1099-Misc income is taxable income, whether it is reported as Self-Employment or Other Income.  The tax you paid on your 1099-Misc income is not necessarily refundable to you, depending on your total income, total tax due and total taxes paid. 

One advantage of reporting 1099-Misc income as Self-Employment Income is that you can claim Expenses against the income, reducing your taxable income.  You are not double-taxed; your 1099-Misc is only reported on your return once.  

Click the link for info on correctly entering your 1099-Misc.

[JamesG1]

This explains the circumstances when graduate stipends are taxable income.

Follow these directions:

• Down the far left side, click Federal.
• Across the top, click Wages & Income.
• Under Your Income, find Less Common Income.  Click Show more.
• Under Miscellaneous Income, 1099-A, 1099-C, click Start.
• Click on Other income not already reported on a Form W-2 or Form 1099.
• Click Yes on Did you receive any other wages?
• Continue past Wages earned as a household employee.
• Continue past Sick or disability pay.
• Click Yes on Did you earn any other wages?
• Choose Other under Enter source of other earned income.
• Enter the income under the Any other Earned Income screen.

See also here.

[JanK]

Thanks for this answer. However, this puts the amount on the "Wages, Salaries, & Tips Worksheet" line 9 (Other earned income). I believe it really belongs on line 13 (Scholarship/fellowship income not on Form W-2) on that form. Amounts on line 13 are also added to 1040 line 1, but it also honors the instructions in IRS publication 970 (2019) pg 6 under "How To Report" scholarship and fellowship grants. It seems the only way to put it there is to do it manually in the "Forms" mode. Also, both these methods require that the 1099-MISC is not entered in TurboTax. There ought to be away to enter this as a 1099 and have the amount end up in the proper place.

Thanks,

Jan.

[ThomasM125]

Since you received a form 1099-MISC, the IRS will look for that income to be reported on your tax return, either on line 8 of schedule 1 as "Other Income", or line 3 of schedule 1 as business income (2019 tax return).

If you e-file your tax return, the form 1099-MISC will be linked to your tax return so that will allow the IRS to match it to the copy of the form that they will receive. This will prevent you from getting a letter and potential adjustment to your tax later on when the IRS matches up their records with what you reported. So, I would suggest you enter the income using the form 1099-MISC entry screen.

If you answer the questions accurately in the form 1099-MISC section in TurboTax, the program will determine the appropriate treatment for the income. Also, you will get credit for the tax that was withheld as reported on line 4 of form 1099-MISC.

[Anonymous]

Following those instructions the income ends up on schedule 1 line 8 which carries to Form 1 line 9. However the IRS instructions for Form 1040 line 1 say this income should be included with W2 income reported on line 1 and you write SCH to the left of the box. How do we get that to happen?

From https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

• Scholarship and fellowship grants
not reported on Form W-2. Also enter
“SCH” and the amount on the dotted
line next to line 1. However, if you were
a degree candidate, include on line 1 only the amounts you used for expenses
other than tuition and course-related expenses. For example, amounts used for
room, board, and travel must be reported
on line 1.

[KrisD15]

If you report the amount as scholarship income in the "Education Section" under Deductions & Credits, it will go to line 1.  

If you report it using the 1099, it will go to Schedule 1. 

The effect on your tax is the same.