Question

1099-NEC Business Details but No Business

Forum|Forum|4 years ago
March 9, 2022
2 replies
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Hi,

I recently started at a church that pays when I serve in the church band. Received a 1099-NEC but when I enter it in the business income section it prompts me to describe my business to which I enter, "band member for Sunday church services". Then it prompts me for info about my business. I don't have a business though. How should I proceed with entering this additional income correctly?

I believe I have filled it out correctly. I selected when prompted for a business code I used the "9999999" code for miscellaneous and selected "cash method" as my accounting method. Also, selected "No' to playing an active role in the business (I don't think I serve over 500 hours a year) and "no" for qualified business income. Hopefully, I am not missing anything.

LeonardS

If you are paid for serving in the church band you are considered to be self-employed for that activity and that is why you received Form 1099-NEC. You will enter your income and all expenses related to your band income on Schedule C Profit or Loss from Business.

To enter your self-employment income and expenses in TurboTax follow these steps:

Open or continue your return
Search for schedule c and click the Jump to link in the search results
Answer Yes to Did you have any self-employment income or expenses?
Follow the on-screen instructions to enter your self-employment information

This Turbotax link Where do I enter Schedule C has information you may find useful.

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VolvoGirl

Employee

Yes you do play an active role in your "business". You ARE the business. It's your own self employment business. The people or company that pays you is your customer or client. You need to fill out schedule C for self employment business income.

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040. The SE tax is already included in your tax due or reduced your refund. The SE tax is in addition to your regular income tax on the net profit.

Here is some IRS reading material……
IRS information on Self Employment
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

1040 Schedule C Instructions
https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

Publication 535 Business Expenses
https://www.irs.gov/pub/irs-pdf/p535.pdf