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April 8, 2024
Question

1099-NEC requiring schecule C which requires Form 7205 when there is no office

  • April 8, 2024
  • 1 reply
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When entering income received for non-employee income on a 1099-NEC, Turbo Tax requires a Schedule C to be filled out.   Employment was as a contractor to the employer so as to avoid being a fulltime employee with benefits.  There is no contractor office or expenses.  The entry for Line 27b of Schedule C is 0 but it requires a Form 7205 to be filled out for energy efficient office building deductions.   

Questions:

1   Why are these forms required?

2  Should the contractor business have to same name as the taxpayer under these conditions? (there is no real business)

3   Should there be a business address for simple contract work?

4  How to I eliminate the need for a Form 7205?

 

Thanks for any help,

Bob

    1 reply

    April 8, 2024

    1   Why are these forms required? Anytime you are an independent contractor, you would need to include a Schedule C on your return.  However, an employer is not allowed to classify you as an independent contract JUST to avoid paying benefits and payroll taxes.  

     

    This means you will pay SE taxes (FICA) of 15.3% on your wages, instead of the normal 7.65% as an employee.  

     

     

    2  Should the contractor business have to same name as the taxpayer under these conditions? (there is no real business)

    You would use your name and address if you are an independent contractor. 

     

    3   Should there be a business address for simple contract work? You always need an address.  If you worked at one location all of the time, then that would be the business address.  Otherwise, you would use your own address. 

     

     

    4  How to I eliminate the need for a Form 7205?  You can use Delete a form to delete form 7205

     

     

    Subcontractors vs employee

    Taking Business Expense Deductions

     

    1. On the menu bar on the left that shows. 

    1. Select Tax Tools 
    2. On the drop-down select Tools 
    3. On the Pop-Up menu select Delete a Form 
    4. This will give you all of the forms in your return 
    5. Scroll down to the form you want to delete 
    6. Select the Form 
    7. Click on Delete

    Always use extreme caution when deleting information from your tax return.  There could be unintended consequences. 

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