TP spent 6 mo in voluntary service working at a home for troubled teens. He was given housing plus $30 / week for incidental expenses. The $30 was paid by check with no withholding. Is this money a non-taxable reimbersment of expenses incurred while doing voluntary work or is it taxable income? If taxable does SE tax need to be paid or does it go on line 21 other income?
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Other Income
My take would first be it's taxable because it was a non-accountable plan. Doesn't sound like to me that TP was self-employed, so I would lean towards Line 21, Other Income. If there were expenses that he paid related to this voluntary service, look at Hobby Expenses on Sch A.
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SE tax
I agree with Bill Tubbs that it is taxable because it was not reimbursement by an accountable plan or a proper per-diem plan. However, I see no reason that this is not 1040 Sch-C income subject to SE tax. This is no different than any consultant or similar independent contractor doing work and incurring business expenses and personal non deductible expenses.
Maybe I should claim I am doing volunteer tax work and the taxpayers are giving me gifts or reimbursing me for my expenses?Comment
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Hobby income
The voluntary service -- no profit motive. You preparing taxes -- I would GUESS you are doing it to make money.
See: http://www.irs.gov/businesses/small/...=99239,00.html
BillComment
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