Question

1099-NEC and 1099-MISC Forms = Self-Employment??

Forum|Forum|2 years ago
August 30, 2023
1 reply
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Hello! We have used Turbo Tax for many years--and now our children use it for their taxes. I have two questions that are sort of related:

1) My wife is a public school teacher. She was elected President of her district's teacher union. When she gets paid her annual stipend, it is reported on a 1099-MISC. I just want to double check.....in the eyes of the IRS, they are saying that she is Self-Employed because of this stipend. Is that correct? Does that mean that she can deduct any expenses related to that job?

2) Each summer, my wife has been accepted to a teacher-program that reimburses her a lump sum of money (instead of for individual expenses. They always report the pay on a 1099-NEC form. This also seems to have the same effect of saying that she is "Self-Employed". Again, is that correct? Does that mean that she can deduct any expenses related to attending that program?

Ask the Experts - Self-Employed - Aug 2023

R

RSUMan

1. The union stipend is miscellaneous income that gets reported as Other Income and is not subject to Self Employment Tax.

2. The summer teacher program is self-employment income and should be reported on Schedule C. She should keep track of expenses incurred in connection with the income and enter those expenses on Schedule C. She will incur self employment tax on the net earnings from the summer teacher program.

Also, thanks for being our customers!

T

TruchanFamilyAuthor

Thank you for the response. Would you happen to know why Turbo Tax combined BOTH 1099s from the Schedule Cs (from the 1099-NEC AND the 1099-Misc), listed them as a combined total on a Schedule SE Self-Employment Tax form, and charged her taxes on BOTH amounts this past year??

R

RSUMan

You have to code the union stipend as sporadic income.

You cannot let that Form 1099-MISC be associated with the teaching Schedule C.

When entering the 1099-MISC, there will be questions about its nature. You indicate it is sporadic; it is not part of her main job; it is a representative position with another entity that may in fact change.