Tax issue - misc (self employment?) income

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Tax issue - misc (self employment?) income

Post by psteinx » Thu Oct 05, 2017 1:59 pm

So my wife has a part-time job at a church (NOT as the bookkeeper).

She gets paid, we have a W-2.

She also received a small-ish amount of extra income $856. My understanding is that this was paid by the church, but somehow from a separate/special fund or not as part of her regular job. For this income, we received a Miscellaneous Income statement, with the amount shown in box 7 (Nonemployee compensation). No withholdings were made from this payment. I don't anticipate this kind of thing happening regularly, but not certain. IIRC, she started this job in early 2016. She's still there, and we're members of the church, for what it's worth.

What do I do with this, tax/1040-wise?

Box 7? (Wages)
Box 21? (Other Income)
Do a schedule C for this as a small business? (Seems overkill - and I don't think there's any real intent for this to be a business or regular in any fashion)

Any of the above options would include it in taxable, and we'd pay the income taxes on it, but I'm not sure if we should be paying self-employment taxes on it too. That would be the case if we went Sch C, but not for the other two I think.

It's not a huge amount. I want to do it accurately and ideally, simply.

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Re: Tax issue - misc (self employment?) income

Post by DSInvestor » Thu Oct 05, 2017 2:06 pm

I think Schedules C or C-EZ would handle that 1099-MISC box 7 non-employee compensation. Self employment tax would apply so Schedule SE as well.

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Re: Tax issue - misc (self employment?) income

Post by jebmke » Thu Oct 05, 2017 2:45 pm

Schedule C/C-EZ is correct.
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Re: Tax issue - misc (self employment?) income

Post by livesoft » Thu Oct 05, 2017 2:51 pm

Schedule C-EZ is trivial to fill out, so not overkill. At least one should read the instructions for this form.
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Re: Tax issue - misc (self employment?) income

Post by RudyS » Thu Oct 05, 2017 3:40 pm

Sure seems like a schedule C or CEZ situation. Remember, you can deduct any expenses associated with that income. I have no idea exactly what that might be because I don't know why she got that money.

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Re: Tax issue - misc (self employment?) income

Post by Spirit Rider » Thu Oct 05, 2017 4:31 pm

It depends on exactly what this 1099 was for.

There is a gray area if it was a one off payment for some activity not considered to be part of a trade or business.

Sometimes this can be considered other income and reported on Form 1040 Line 21 and requires no SE taxes. Even if it is a gray area, you can file a Form 1040 Schedule C and Schedule SE.

One reason to do this is if it would be advantageous to adopt a one-participant this year or some future year.

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