Pacun Posted February 13, 2011 Report Share Posted February 13, 2011 TPs have a child in high school. He is 14 and their dependent. Diocesis and school provided 8K in scholarship to the student and father's employer provided another 8K for the student. School costs 16K a year and student lives with parents and go to schools every morning and comes back in the afternoon. No room or board involved (emphasis added). Father got a W-2 form for 51K and a 1099-misc with 8K on box 7 misc income. Where do I report this so that the IRS 1099-misc matching is satisfied? To me, this is not taxable scholarship but I have to deal with the 1099-misc and the easiest way is file Sch C with 0 expenses. If you see it from another angle, in order to get paid 8K from this employer you have to spend as much in tuition for you or your children. Thanks for your answers. Quote Link to comment Share on other sites More sharing options...
Eli Posted February 13, 2011 Report Share Posted February 13, 2011 I think it should have been reported as other income (box 3) on a 1099 Misc. Is it possible the employer misunderstood the difference between the two types of income? On the Sch C he will be responsible for SE taxes. I don't think he's in any type of business. Just my two cents :-) Quote Link to comment Share on other sites More sharing options...
mcb39 Posted February 13, 2011 Report Share Posted February 13, 2011 I think it should have been reported as other income (box 3) on a 1099 Misc. Is it possible the employer misunderstood the difference between the two types of income? On the Sch C he will be responsible for SE taxes. I don't think he's in any type of business. Just my two cents :-) But, in my experience, it is next to impossible to get anyone to change a 1099. Worth a try, but good luck. Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 13, 2011 Author Report Share Posted February 13, 2011 This is the answer I got: "In response to your question, this information is provided: Unless the employer has a section 127 plan in place, it is likely taxable – see below for details. If an employer reports income to an employee for employer-paid education, it usually is on the w-2. I assume that he put it on a 1099 because it was for a dependent. I assume that you have to put it on line 21, as this is not business income for schedule C." Quote Link to comment Share on other sites More sharing options...
Chowdahead Posted February 14, 2011 Report Share Posted February 14, 2011 If you put it on the Sch C, the poor sap will pay $1200 in self-employment taxes on it. I'd consider it "other income". It's worth the $1200 gamble IMO. Quote Link to comment Share on other sites More sharing options...
Eli Posted February 14, 2011 Report Share Posted February 14, 2011 If you put it on the Sch C, the poor sap will pay $1200 in self-employment taxes on it. I'd consider it "other income". It's worth the $1200 gamble IMO. It would probably be taken care of with a letter later on down the road if it was questioned. Eli Quote Link to comment Share on other sites More sharing options...
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