How to Report 1099Misc Box 7 Income

[photoman]

How to Report 1099Misc Box 7 Income



I have a client that received a 1099Misc Box 7 Income of 6000. She is retired receiving Soc Sec and Pension. She does occasional work on a church website. She is considered a backup helper when the primary person needs help ,etc. Although she will receive a 1099 Misc each year, she never knows if she will make 2000 or 4000 or 6000. This is just for one place.

I can only find where it should be considered SchC Self-Employment Income.

Any thoughts on this

Thanks,Ron

[RitaB]

It's compensation for work

How to Report 1099Misc Box 7 Income



I have a client that received a 1099Misc Box 7 Income of 6000. She is retired receiving Soc Sec and Pension. She does occasional work on a church website. She is considered a backup helper when the primary person needs help ,etc. Although she will receive a 1099 Misc each year, she never knows if she will make 2000 or 4000 or 6000. This is just for one place.

I can only find where it should be considered SchC Self-Employment Income.

Any thoughts on this

Thanks,Ron

She is a subcontractor. She is working. It's subject to SE tax here at my office. In my opinion, Box 7 is for work. Box 3 is for other (non-work) income that is not subject to SE. Prizes and such. Looks like the compensation is in the right box to me. If she worked at McDonald's for two days, her Social Security and Medicare taxes would not be refunded.

[photoman]

Thanks for the reply ,that's how I thought it should go.

Ron

[RitaB]

You're welcome

Thanks for the reply ,that's how I thought it should go.

Ron

You're welcome. I didn't mean to be short with you. I'm a little grouchy and you always hurt the one you love.

[ttbtaxes]

In order to be subject to SE tax the work has to constitute a trade or business. One of the factors is regular and continuous. Take a look at Reg 1.1402(c)(1).

The payor almost always throws untaxed payments into Box 7. That doesn't mean they are always subject to SE tax.

[Burke]

"She will receive 1099MISC each year." Sounded like it was continuous to me. And Section 1.1402 doesn't really spell it out so exactly. Neither does 162. The reference to "continuity and regularity of activities....." comes from Rev Ruling 58-112.

[RitaB]

Well, there ya go

"She will receive 1099MISC each year." Sounded like it was continuous to me. And Section 1.1402 doesn't really spell it out so exactly. Neither does 162. The reference to "continuity and regularity of activities....." comes from Rev Ruling 58-112.

And all of you who only work on taxes January - April 15 are paying self-employment tax. A rose by any other name would have self-employment thorns. Let's go with the spirit of the law here - she worked. Did I mention I'm grouchy?

[Burke]

I resolved to maintain my coolness this year and let late-filers stew in their own juices. It's not my problem, and I got tired of babying them, calling and asking where their stuff is, etc. etc. But mainly its an internal thing---maybe transcendentalism or something like that. No, I am not smoking.....

[Gretel]

I resolved to maintain my coolness this year and let late-filers stew in their own juices. It's not my problem, and I got tired of babying them, calling and asking where their stuff is, etc. etc. But mainly its an internal thing---maybe transcendentalism or something like that. No, I am not smoking.....

Of course it is, only we can take care of ourselves and respect ourselves ....prevents a lot of heart burn, heart attacks, panic attacks.

[TXEA]

The concept of regular and continuous as discussed in Reg 1.1402(c)(1) has been the subject of much debate. I have always used the standard of the "one-time" job. For example, an individual asked to work one day or one week for a contractor or other "employer" would be an example of the work not being continuous.

If one is available on multiple occasions to work, then it is hard to argue that it is not regular and continuous. It is also important to understand in these situations that just because an individual received a Form 1099MISC with a box 7 amount, it does not mean they are not a common law employee. If the individual is not being classified correctly, discuss the situation with the payer, and if necessary, file Form SS-8.

[DaveO]

Agree it's self employment but don't forget about taking SEHI for Medicare. That can take a bit of the sting out.

[Burke]

Absolutely. Get that Medicare premium!

[TAXNJ]

Well

And all of you who only work on taxes January - April 15 are paying self-employment tax. A rose by any other name would have self-employment thorns. Let's go with the spirit of the law here - she worked. Did I mention I'm grouchy?

Well said and a little poetic. Would be nice to get an exception for self employment tax for the Jan-Aprl for non continuous work.

[FEDUKE404]

WHAT Schedule SE tax ?

From some of the prior board comments on this topic, I've often wondered whether I can ignore Sch SE for my "temporary" Jan-Apr tax work, and even better apply for unemployment from May through December.

Think that would fly ? ?

(I'm too old to climb ladders and paint houses for that oft-mentioned exclusion to Sch SE from a summertime Form 1099-MISC.)

FE

[RitaB]

Where have you been all summer?

From some of the prior board comments on this topic, I've often wondered whether I can ignore Sch SE for my "temporary" Jan-Apr tax work, and even better apply for unemployment from May through December.

Think that would fly ? ?

(I'm too old to climb ladders and paint houses for that oft-mentioned exclusion to Sch SE from a summertime Form 1099-MISC.)

FE

OMG, I've been hanging siding. Painting would be a piece of cake. Thanks.