AboutCarole Dunton Expertise Preparation of individual income tax returns including social security, pensions, lump sum distributions, sale of personal residence, stock and mutual fund sales, distributions from individual retirement accounts, moving expenses and itemized deductions.
General knowledge of schedule C for small sole proprietorships.
No experience in corporate, estate, partnership or large business returns.
Experience 9 years as tax preparer for major national firm.
Question I do the income taxes for my mother in law , using Tax Cut (last year) and Turbo Tax this year,she received a 1099 Misc for working in the cafeteria at a Church run school .Last year she was paid 904.00 for the year and I entered it using Tax Cut , followed the instructions and entered the amount as wages on line 7 , 1040 . It was suject to taxes as income . This year I'm using Turbo Tax and she was issued a 1099 Misc for 952.00 . When following the instructions and using the work sheet , it gives me a choice of three entries , SELF EMPLOYMENT , FARMS , WAGES TIPS . She is not self employed , she doesn't own a farm and she doesn't get tips. When I put in under wages and tips , it sends me to unreported tips . She receives social security , a very small income from two IRA's and interest from her savings . She does not earn enough to do a return but the Turbo Tax says she owes social security tax and medicare tax . Tax Cut last year did not place the income in the same place .On her 1099Misc ,box 7 is checked for non employee compensation . What should I do ? Tell her not to file at all ( being she didn't earn enough to file) or send in the return with 69.00 for ss and medicare taxes or purchase Tax Cut and use it instead. Please help ?.....John
Answer Hi John,
Technically she should pay social security and medicare tax on the non-employee compensation. I'm surprised that Tax Cut didn't bring that up last year.
If she doesn't file at all she may someday get a letter from the IRS requesting payment.
I would just pay the ss and medicare and be done with it.
