Played Church Organ

[Oxtrainer]

Client filled in for temporary absence of church organ player. He earned 800 dollars
and they are not issuing a w2 or 1099. Does this have to go on a sched C or can it go on
line 21. Your opinions please.

Thanks much.

[Kram BergGold]

It depends

If your client does not normally make money from playing the organ then line 21 is an arguable positon. If he holds himself out to others regularly as a musician then Schedule C.

[Bees Knees]

The court case that allowed something similar to escape SE tax was a controversial decision. I agree you can make a good argument for it going on line 21, however, citing that court case is not necessarily going to get an IRS auditor to roll over. Claiming that temporary work is not subject to SE tax may be something you can only win by taking it to tax court.

I’m not saying don’t try it. I’m just saying it is a position you may have to fight for.

[Jiggers]

Church Organist

What I find in situations like this is that the organist probably gave back in tithes that amount and more.

I always suggest that they don't take any compensation for this and just cut their tithes by that amount.

[JohnH]

Memory

I remember one church organist that I would have paid extra if he would have promised NOT to play. (Wonder how that would have been treated on his tax return ?)

[bertrans]

Compensation for services not rendered?? That's a poser

[Burke]

Played Church Organ

The court case that allowed something similar to escape SE tax was a controversial decision. I agree you can make a good argument for it going on line 21, however, citing that court case is not necessarily going to get an IRS auditor to roll over. Claiming that temporary work is not subject to SE tax may be something you can only win by taking it to tax court.

I’m not saying don’t try it. I’m just saying it is a position you may have to fight for.

Putting it on line 21 (Other Income) does not automatically omit Sche SE if it is earned income. You can still complete SE and pay the tax. Advantage in putting this type of one-time charge income on line 21 (at least in my state) is that if you put it on Sche C, it gets reported to the state for business license tax purposes.

[travis bickle]

don't see why it is not sch c income,

Client filled in for temporary absence of church organ player. He earned 800 dollars
and they are not issuing a w2 or 1099. Does this have to go on a sched C or can it go on
line 21. Your opinions please.

Thanks much.

after all, he received payment for services rendered.

what if we were discussing a "replacement for the regular landscaper"?
is there a difference?

at least this way your client may be able to deduct some expenses.

i may not always have the answer my client wants to hear, but i have to live with the ethics of the situation [as i understand it].

[taxmandan]

Does he work as a musician for money other than for the church as a sub? If he has no profit motive and this was a one time occurrance I would put it on line 21 and not include any SE tax. If he is a musician who does other gigs for pay, even if only occasionally or as a W-2 employee, then he pays the SE tax.

[DaveO]

I agree with Taxmandan on this one.

Even if an activity produces a big profit if it's not a regular and continuous activity then it's a line 21 item. I see 1099's issued from the state to several of my clients for taking care of a child in foster care for a few days or for relieving a care giver. Do they run a daycare or hospice service? No way. I report the income on Line 21.

In a couple of audits this year on direct sellers of cosmetics the auditors focused on the business motive. They wanted to see work logs and schedules. If there were no sales activity for a month or two they would cite that as evidence the activity was not engaged in for profit. Months where a great deal of time was spent didn’t seem to out weigh the slow months. The fact the tax payers had other jobs counted heavily against them in the auditors mind. Sloppy records and lack of any sort of accounting system didn’t help either. The fact that I hadn’t prepared the returns (self prepared) was the only bright spot for me.

So, in my opinion the service doesn't get to have it both ways. The fact of not behaving as a business must be considered for the line 21 filer as well as the "C" filer.

I enjoy entering competitions where I occasionally win cash prizes. This is an activity I engage in on a regular and continuous basis and have done so for years. I have complete records of the activity. I track my results and attempt to refine my entries to improve my chances of winning. I subscribe to publications, attend classes and seminars and am a member and officer of a club with other people who enjoy the same activity. I travel to these competitions and serve as a judge. I have expertise in this activity and am sought out by other people seeking to improve their skills. Does that make me "in the business" of entering these competitions? If so, I've got many times the expense as I have prize money. If I reported this on "C" instead of Line 21 the IRS would want to disallow it and rightly so. Is it the IRS’s position that I should report on “C” if my prizes exceed my expense but on line 21 if my expenses exceeds my prizes?
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