Retired insurance agent

[liberty]

This is for tax year 2019. A retired insurance agent received a 1099-MISC with box 7 nonemployee compension 9500. Usually I put that on schedule C. But he claimed his tax preparer the year before put it on line 21 as other income. Am I missing something?

[TAXNJ]

see TTB prior reply post below and link:

Commissions paid to a retired insurance salesperson that are reported on 1099NEC (formerly MISC) are subject to self-employment taxes. See exception outlined on pages 25 and 26 of PUB 334 if certain conditions are met. Also, such payments to a surviving spouse are NOT treated as subject to self-employment tax and are not reported on Sche C.

https://forum.thetaxbook.com/forum/discussion-forums/main-forum-tax-discussion/305091-residual-insurance-payments-to-deceased-insurance-agent

[Burke]

I have put these type payments on Line 21 in the past, just to avoid a Sche C. However, if they were subject to SE tax, which many times they were, I always completed a Sche SE as well and calculated the tax which carried to the return, and qualified TP for SEHI, IRA contributions, SEPP, etc if warranted. When insurance agents retire, they are generally no longer employees of a company, but a great many retain their licenses to sell and often have commissions from those sales. Some 1099's are for residual commissions from past sales when they were working. If you use Line 21, you cannot deduct expenses.