Should a teacher who receives a 1099-MISC have to file Schedule C?

My wife is a full time school teacher and as such gets a W-2 every year. Last year the school's budget allowed for several teachers to get money from a technology account to buy a new computer for their personal use. They gave her $1000 and she bought a new computer. At year end, they sent her a 1099-MISC with $1000 showing in Box 3 as Other Income. My question is, where do we report this, on line 21, form 1040? Or does she need to file Sch C and Sch SE? As she is not running a trade or business as an independent contractor, I shouldn't think she would have to. Where and how do we report this?
  • Other income in Box 3 should get reported on Line 21, Other Income.  No need to file a schedule C.
  • Thanks for your quick reply.  I would think this would be correct as well, however, in searching on the web, I have only been able to find people making it sound like the receipt of a 1099-MISC automatically requires us to file a Schedule C and then Schedule SE.  Would you be able to point me to the exact spot where the IRS addresses this very question so I can feel comfortable about this choice?
  • I went back through Turbotax, knowing that my wife, as a teacher is NOT an independent contractor and looked for the correct reason TT asks as to why she was paid this technology amount to buy a computer for her use.  It was a choice between general extra income from her school but provided  her school was NOT her employer (which is not true), or that the money was prize money.  How do I characterize it?
  • Good question.  I think I would characterize it under "prize money" - because the school awarded her the money to buy a computer FOR PERSONAL USE.  It was not a business-related item.  (In fact, one could almost argue that it was a gift, and shouldn't be taxable at all to the teacher - and that the 1099 should never have been issued.)
  • Box 3 is generally used for prizes and awards and goes on Line 21.  Box 7 is self employment income and goes to Schedule C.  Box 1 is rents and goes to Schedule E.
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