MsTabbyKats Posted January 29, 2015 Report Share Posted January 29, 2015 I remember in the past one could enter something on Line 21....and make it subject to SE tax. I'm using TaxAct....which doesn't allow this. On the SE form...it says the income needs to come from C or F. Is this the way it is now....or (forget the program) can someone generate SE tax using Line 21? Quote Link to comment Share on other sites More sharing options...
Lee B Posted January 29, 2015 Report Share Posted January 29, 2015 I have had to wrestle with line 21 3 or 4 times in the last two years and I don't remember a way to do that. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted January 29, 2015 Report Share Posted January 29, 2015 Use Form C-EZ. Problem solved. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted January 29, 2015 Author Report Share Posted January 29, 2015 Use Form C-EZ. Problem solved. Not solved..... For H1-B visa/green card issues....client doesn't want to show "self-employment"...or having a business. However....her main job requires this internship which reported on a 1099-Misc....so I'm coding it as "educational". And, if it becomes a Green Card issue, her employer will state that it was part of her job, and for whatever reason, they had to pay her directly, instead of to her university. Then, Philadelphia becomes a problem...since they have a requirement. But, I've already discussed with the happy helpful rep how she can avoid the Philadelphia business tax form. Thanks...... Life would have been so simple if I could have just put it on Line 21. Quote Link to comment Share on other sites More sharing options...
Pacun Posted January 29, 2015 Report Share Posted January 29, 2015 What's wrong with saying on line 21 "income wrongly reported on 1099" and fill out form SE. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted January 29, 2015 Report Share Posted January 29, 2015 (edited) Not solved..... For H1-B visa/green card issues....client doesn't want to show "self-employment"...or having a business. However....her main job requires this internship which reported on a 1099-Misc....so I'm coding it as "educational". And, if it becomes a Green Card issue, her employer will state that it was part of her job, and for whatever reason, they had to pay her directly, instead of to her university. Then, Philadelphia becomes a problem...since they have a requirement. But, I've already discussed with the happy helpful rep how she can avoid the Philadelphia business tax form. Thanks...... Life would have been so simple if I could have just put it on Line 21. If you apply SE, it IS self-employment income. What the client wants should never trump IRS regs. DANGER DANGER Edited January 29, 2015 by Jack from Ohio Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted January 29, 2015 Author Report Share Posted January 29, 2015 (edited) What's wrong with saying on line 21 "income wrongly reported on 1099" and fill out form SE. Because Line 21 will not flow to SE. I put it on the C....just as a lump sum...no expenses....and coded it as "educational". I know a few years ago there was an option to report on Line 21...subject to SE. I was hoping that option still existed...but it doesn't. The issue wasn't really with IRS...but with Philly. I didn't want Philly to think she had some kind of business....based on a C being filed. But, I solved that one this morning. (You need to get a Business Number with Philly if you have a business....that was the real problem. She didn't want to do that. If I could have used line 21...it would have eliminated the possibility of potential issues.) So...all is good. Edited January 29, 2015 by MsTabbyKats Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 8, 2015 Report Share Posted February 8, 2015 To answer your original question, you have to open 1099misc, then on line 7 enter the amount your client got paid and then you have 3 choices from the pull down menu: 1.- Sch C 2.- Line 21 with SE 3.- Line 21 without SE. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 8, 2015 Report Share Posted February 8, 2015 To answer your original question, you have to open 1099misc, then on line 7 enter the amount your client got paid and then you have 3 choices from the pull down menu: 1.- Sch C 2.- Line 21 with SE 3.- Line 21 without SE. Those options were part of a program update. I think 14.2. However, choosing Line 21 with SE does add the income to SE without a Schedule C. How Philadelphia will treat it is another matter altogether. It is still my contention, that if it is subject to SE (Self Employment tax) it IS self-employment. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 8, 2015 Author Report Share Posted February 8, 2015 Thanks...but I don't use ATX. My program didn't give me the option. (If it did....I wouldn't have asked.) On the SE form itself...it said the info had to come from a C..F..or K-1. Maybe it's just a program thing... The client knows she has to pay tax on the money...this was NOT the issue. It wasn't really self-employment. She is on some kind of study program with a hospital...and the hospital could not pay her directly for this part of the program. The issue is a VISA issue...and when she goes for her Green Card. According to the VISA...she is only allowed to work for the hospital that recruited her. But, part of her :job" was to do an internship (the 1099-Misc income) When she goes for the Green Card...she doesn't want to have a problem with breaking the treaty...so she doesn't want Philadelphia to classify her as a "business owner". Anyway...I called Philly...and got it all worked out...and filed it as "additional job income" instead of Schedule C income. I deal with a lot of non-resident aliens on J and F visas. This is very different than regular returns. I have to keep "treaty regulations" ahead of IRS/Philly regulations If the IRS questions things, you just pay them what they want. (I'm expecting the flames for this...but, this is the stuff that keeps my grey matter active. ) It's better than having a Green Card denied. 1 Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 8, 2015 Report Share Posted February 8, 2015 Those options were part of a program update. I think 14.2. However, choosing Line 21 with SE does add the income to SE without a Schedule C. How Philadelphia will treat it is another matter altogether. It is still my contention, that if it is subject to SE (Self Employment tax) it IS self-employment IRS main concern is that you pay SS taxes. So, I don't see a main issue if you use line 21. Line 21 will not qualify you for EIC credit and IRA contributions so, I don't think the IRS will have a big issue with that as long as you pay SE taxes. If this is not the time you use line 21 with SE, when will you use it? Why did the IRS approve ATX if that was a mistake? Quote Link to comment Share on other sites More sharing options...
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