Where is an amount in 2020 Form 1099-MISC Box 14 Nonqualified deferred compensation reported on Form 1040?
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Tax reporting for distributions from nonqualified deferred compensation plans depends on the employment status of the plan participant. Tax information for employees is reported using Form W-2, while tax information for independent contractors (i.e., agents or members of the Board of Directors) is reported using Form 1099 MISC.This post is for discussion purposes only and should be verified with other sources before actual use.
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Opps... there should be a tab 1099M in your tax program under the general category "Income".This post is for discussion purposes only and should be verified with other sources before actual use.
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What program are you using?Originally posted by taxmcp View PostThis post is for discussion purposes only and should be verified with other sources before actual use.
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Ooooo! Your doing the return by hand??????This post is for discussion purposes only and should be verified with other sources before actual use.
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BOB W replied
02-02-2021, 11:26 PM
"What program are you using?"
This question was in regards to a customer at my work another tax preparer who happens to be my boss had. There is an income tab and a place to put in the 1099-MISC but nothing from that box 14 flowed over onto the Form 1040. From what I read, the taxpayer should have had that amount reported in Box 1 of a 1099-NEC also and there should be an additional tax on compensation received from a nonqualified deferred compensation. However, what I read about this situation is almost as clear as mud to me.
My boss said his friend told him the amount in 2020 Form 1099-MISC Box 14 Nonqualified deferred compensation has no effect on Form 1040. I'm not sure I agree, so I would like to know how I should handle this were this my client.Comment
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No, we use a tax software at work. I think nothing flowed over to the 1040 from the 1099-MISC because my boss either did it wrong or the customer didn't have all the forms he should have had to report the income or both.Originally posted by BOB W View PostComment
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I use Intuit ProConnect Tax Online for my own tax clients outside of where I am employed and so far I haven't had any clients who have nonqualified deferred compensation reported to them.Originally posted by BOB W View Post
It's my understanding the program at work is modified Drake. I've never used Drake anywhere so I can't compare it with Drake.Comment
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I tested it on my software and nothing flowed as well to the 1040. I've never had a nonqualified deferred comp before so I may have done it wrong. But how wrong can it be filling in box 14 and let the program take over...???This post is for discussion purposes only and should be verified with other sources before actual use.
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Have you looked at “Nonqualified Deferred Compensation Plans - The TaxBook Tab 29-21 & 22Always cite your source for support to defend your opinionComment
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i found this:
Form 1099-MISC - Nonqualified Deferred Compensation
If you received a Form 1099-MISC Miscellaneous Income instead of a Form W-2 Wage and Tax Statement, the income you received is considered nonemployee compensation or self-employment income.
Self-employed status means that the company or individual you worked for didn’t withhold income tax or Social Security and Medicare tax. As a result, you’ll need to complete Schedule C (Form 1040) Profit or Loss From Business (or Schedule F (Form 1040) Profit or Loss From Farming) and Schedule SE (Form 1040) Self-Employment Tax.This post is for discussion purposes only and should be verified with other sources before actual use.
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Exactly. Deferred compensation while the individual is still an employee is reported on the W-2, subject to FICA and Medicare. When the employee retires and is no longer an employee or is an independent contractor, the deferred comp is reported on the 1099-MISC (formerly) or 1099-NEC and is subject to self-employment tax. It's best to connect this to a Schedule C to calculate the SE tax and it would be an SSTB for QBI (20% deduction if under phaseout). Same as Board Fees from companies.Comment
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QBI.... Cool.....Originally posted by Lee Welter View PostThis post is for discussion purposes only and should be verified with other sources before actual use.
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Why is it an SSTB? Wouldn't that be tied to whether the source of the deferred comp is or is not an SSTB? Or, because it's now on a Sch C, it matters what service the Sch C provides?Comment
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