Where do I report speaking honoraria income?

[jarosz6]

My spouse received $200 and $500 for 2 separate speaking engagements. Can they be considered gifts and not reported/taxed? He did not receive a 1099 or any such tax form, just a check.

[LeeM · Accepted solution]

Since honorariums are generally not considered self-employment, you would enter that as miscellaneous income by following the directions below:

• Select Federal Taxes, Wages and Income and then scroll to the bottom
• Select Miscellaneous Income under the Less Common Income category then
  
• Select Reportable Income, then
• Select "Yes" and, in the next screen, describe the income.

[tax9]

What is your support for the assertion that honoraniums (actually, honoraria is the correct plural) generally are not considered self-employment income. I suggest that they frequently constitute self-employment income and should be reported as such on Form 1040, Sch. C. For example, someone who frequently receives speaking honoraria will be considered to be in a trade or business.

[DaveF1006 · Accepted solution]

After careful research, IRS Revenue Ruling 55-431 states if an individual accepts an occasional invitation to make a speech for, which he or she receives an honorarium, he or she is NOT engaged in a trade or business for self-employment tax. In your particular instance, two speaking engagements are occasional and are considered other income.  

Here is a link to the journal of Accountancy, which is a trusted source for tax research information. Note the reference it makes to Revenue Ruling 58-112 that characterizes a trade or business activity as one that is regular, frequent and continuous. It also states in the link that Revenue Ruling 55-431 states “as a general rule, an individual who accepts an occasional invitation to make a speech is not engaged in a trade or business.” After this quote, it explains what other income is.

This link  briefly references Revenue Ruling 55-431. Please select this hyperlink for more supporting detail.  

[napop]

Hello, when I enter my speaker honorarium as miscellaneous income, TurboTax automatically transfers it to self-employment income. Why? As you said, this is not considered self employment.

Thank you for your help.

[DMarkM1]

Be sure it is entered using the steps above.

Under the  "Miscellaneous Income" category, step 3, be sure to scroll down to the bottom and find "Other Reportable Income."  It should not show up in self-employment.  

[Suomalainen]

Hi Dave.  

Awesome Answer..

[jeffl22]

This is very helpful. One follow up question: what if the speaking engagement took place at a conference in a state other than that in which I live and work? Do I need to file a tax return in that state as well?

[Hal_Al]

Q. What if the speaking engagement took place at a conference in a state other than that in which I live and work? Do I need to file a tax return in that state as well?

A. Yes, but "nobody" does. See http://money.cnn.com/2013/06/28/pf/taxes/business-traveler-tax-threat/  If you live in a state without an income tax (e.g. FL or TX), it’s more likely you should file in the work states. You can't use the "it all comes out even" rationale for not filing.

The income may be low enough that you may not be required to file. State filing requirements

https://ttlc.intuit.com/questions/2903200-do-i-need-to-file-a-state-return

[JulieS]

It depends on the state and the amount of income, and whether the state has reciprocity with your home state.

For a more exact answer, please clarify the amount of income in question, in which state it was earned and where you live.

[jeffl22]

Thanks Julie! I live in PA and earned $3600 for a speech at a conference in Baltimore, MD. 

(THere does appear to be some kind of reciprocity between PA and MD, but it is unclear if it applies to this kind of income.)

How should I treat any out of pocket travel expenses that I incurred to attend this event? Can I deduct these from the honorarium?

Thanks for the speedy replies!

[GeorgeM777]

You are correct in that Pennsylvania has signed reciprocal agreements with Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia under which one state will not tax employee compensation subject to employer withholding of the other state.  However, these agreements apply to employee compensation only.  The employee compensation aspect of the tax reciprocity between PA and MD is where there could be an issue.  In that regard, was the speech you gave in MD done in connection with your work for your employer?  In other words, was it part of your job.  If the speech was made in connection with your job for your employer, then the honorarium you received can just be entered as "Other Income" in TurboTax.  

However, if the speech was not part of your job, but something unrelated to your employment, then the tax situation may likely be different.  You may need to file a MD return, probably as a non-resident.  MD does have exemption amounts based on the amount of your federal AGI, and such exemption amounts decrease as your federal AGI increases.  Therefore, depending on your income, if you owe MD tax, the amount you owe may not be based on the entire amount of your honorarium.  

You may be able to deduct your expenses.  Your ability to deduct expenses will depend in large part on whether this was self-employment income or whether your speech was more like a hobby (the IRS defines a hobby as an activity you do for enjoyment rather than to make a profit).  Hobby expenses are not deductible as they are considered miscellaneous expenses.  Expenses associated with self-employment can be greater than the income earned and thus can result in a business loss.  

Follow-up with additional information about the nature of the work you performed in MD and we can provide additional information about your tax situation. 

@jeffl22

[Edited 03/08/22|7:06pm PST]

[ChuckSherman]

I received three honoraria and received a 1099=NEC for each. I reported these in TurboTax when asked about any 1099-NECs received, and it created a Schedule C as if they are Business Income. When I also add them as Less Common/Miscellaneous Income, the Schedule C does not disappear, and I have reported my income twice. What should I do? Is this a bug in TurboTax?

[MarilynG1]

No, the 1099-NEC is now considered by the IRS to be reporting Self Employment Income.  

If you have entered the 1099's as Miscellaneous Income, type 'Schedule C' in the Search area, then click on 'Jump to schedule c'.

At the Business Summary page, you can Delete the business item.

[ChuckSherman]

I entered the income from my three 1099-NECs under Miscellaneous income, and I deleted the Business income, but do not see where the Search area is to type "Schedule C" and to click "Jump to Schedule C". I feel I am almost there.

The Review tells me "Some of your 1099-NEC forms don't include enough info for us to know where to report the income on your return." I expect I do NOT need to file a Schedule C.