Level 5

Question

1099 NEC

Forum|Forum|2 years ago
April 10, 2024
3 replies
17 views

A high school kid ref for hockey, received 1099 nec from school for 1400. I put it as other income.

Standard deduction become 1250, taxable income become 150. She has to pay tax for that income. Doesn't seems right?

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dascpa

Level 11

If an NEC and she performed services why would it be other income? It should be on a Schedule C subject to self-employment tax. Should have been a W-2 but most schools today seem to do it as a 1099-NEC.

And why isn't it right that she pays tax. I pay tax, so do you. She performed services for a price. Life lesson learned.

T

thetaxdoctor1

Level 3

I don't think you should be giving advice on here about 1099s.

I know people who participated in a study and for that they got a 1099, it would be other income and not a schedule C as not a business and no expenses to put against it.

C

cclark

Level 3

I have done several high school and college kids who have an internship or ref football or basketball. I just put it as other income because it is not a business. I have never had any issues with the IRS coming back to the client and saying it's a business. Most likely they will owe tax on the other income as well.

dascpa

Level 11

Not a business - so everyone who does a one-off service gets out of self-employment tax?

The issue is was it for services rendered, not whether it's a business.

If I receive a commission/referral fee from my realtor for referring a client, a commission is a Sch C item but I'm not in the business of referring clients so it's other income not subject to SE tax.

For $1,400 at probably minimum wage this person worked ~ 100 hours. That's self-employment income.

BobKamman

Level 15

When my kids were still in school the refs were adults and paid in cash. No 1099 involved, so most probably did not pay tax on it. Which means kids these days must also contribute to Social Security.

She refs at only one school? So no mileage costs? Didn't have to buy uniforms or whistles? Rule books?

IRonMaN

Level 15

I had one just last week with a kid being a ref. Parents were prepared and came in with a list of expenses

Slava Ukraini!

C

chenschuhAuthor

Level 5

I put it as other income because this is one time deal. If he continue to do it next year, then it become a business, I would use schedule c.

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