JACKSORH Posted February 7, 2011 Report Share Posted February 7, 2011 My client received a 1099 Misc. for which he won some windows that were installed at his personal residence. The supplier issued him a 1099 and the amount is reflected in Box 7 nonemployee compensation. How is it recorded on the 1040. Generally, a schedule C and SE would be prepared, but I don't see how in this case I would prepared this form. Need your help, it was a prize that my clients won and now they are asked to pay taxes on the prize. How do I handle this one. Thanks for your speedy reply. Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted February 7, 2011 Report Share Posted February 7, 2011 Normally, I would expect a prize to be in box 3. Who did he win this prize from? Does it have anything to do with his job, making it compensation rather than a prize? Quote Link to comment Share on other sites More sharing options...
JACKSORH Posted February 7, 2011 Author Report Share Posted February 7, 2011 Normally, I would expect a prize to be in box 3. Who did he win this prize from? Does it have anything to do with his job, making it compensation rather than a prize? He is retired and that amount was in box 7 as previous stated. I know if it was in box 3 I could include it in the wages. The supplier is a window company. I guess they had a drawing and this couple won the windows, hence a 1099M was issued to them. Quote Link to comment Share on other sites More sharing options...
grandmabee Posted February 7, 2011 Report Share Posted February 7, 2011 PUT ON LINE 21 Quote Link to comment Share on other sites More sharing options...
TAXMAN Posted February 8, 2011 Report Share Posted February 8, 2011 I have seen other prepares put amount on 1040c-ez and a like amount on expense line and then enter on 1040 line 21 where prizes are supposed to be. They said this way IRS computers matched up to where they would be looking for the 1099 to be. I would probably ask issuer to correct. Unless it is disguised wages. Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 8, 2011 Report Share Posted February 8, 2011 I agree with Bcolleen, put it on line 21. I understand the previous post about the IRS matching and looking for box 7 income that should trigger SE tax. However, amounts in box 7 can be added as income not subject to self employment tax. Of course, if it is disguised as wages then that is another story. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted February 8, 2011 Report Share Posted February 8, 2011 The one question not clear in the original post is what is his relationship to the company providing the 'prize'? If he was just a customer of a store that had a contest, then it's clearly a prize, taxable but not subject to SE tax. BUT if he is an employee of the company that makes the product, or an employee of the company that sells the product, that creates a different issue. Then, it MIGHT be SPIFF, or it might be compensation subject to SE tax. Quote Link to comment Share on other sites More sharing options...
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