Ln 21 other income vs S-Corp

[JohnH]

C c

He might pay in more ways than one. A few years back I was approached by a man in my church who had been reporting no salary & wages. His accountant had been filing the s-corp this way for years. He had become disabled and was having trouble getting SocSec Disability approved even though he was legitimately disabled. He was right on the bright line for quarters if coverage, plus he wasn't qualified for very much of a benefit. Felt sorry for him but told him I couldn't help. I also got the idea he was trying to figure out how to lay this off on the accountant - a second reason not to get involved.

[Gary2]

If I might get back to basics for just a moment, how is it that there are no expenses for the Schedule C? Is the W-2 job reimbursing the doctor for all of his license renewal fees, professional memberships, journal subscriptions, continuing education, personally owned equipment? Is there no travel between the two jobs?

What about malpractice insurance? How is he covered for the Sch. C work?

[AZ-Tax]

That is the issue

If I might get back to basics for just a moment, how is it that there are no expenses for the Schedule C? Is the W-2 job reimbursing the doctor for all of his license renewal fees, professional memberships, journal subscriptions, continuing education, personally owned equipment? Is there no travel between the two jobs?

What about malpractice insurance? How is he covered for the Sch. C work?

That is the issue. All those exps you mentioned are paid, not reimbursed (except for travel which is very very little), directly by the issuer of the 1099-misc.

[Gary2]

So in addition to paying him $30K, they're picking up all of his expenses, which his primary employer isn't? Seems like a sweet deal. Plus he could probably increase his savings by putting money into a SEP.

Is there some other connection between the primary employer and the company issuing the 1099-MISC?