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My wife gets a bonus when her company hits sales targets. It's reported on a 1099-MISC line 7 from a payer owned by the company on her W2. Is this self-employment income?

Forum|Forum|7 years ago
June 6, 2019
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The bonus is stipulated in her employment contract, and the company that issued her W-2 is a holding company that owns the company she works for (that sent the 1099-MISC).

TurboTax Premier Online

Best answer by PhyllisG

Because your wife received a Form 1099-MISC with Box 7 completed, she is considered an independent contractor as it relates to the bonus.

She will need to complete a Form 1040 Schedule C or C-EZ. (TurboTax will determine the applicable form once she begins entering her information). She should claim any business expenses related to the bonus no matter how minimal. She may also be subject to self-employment tax if her net self-employment income is $400 or more.

To begin entering the information in TurboTax, she will need to:

Type Schedule C in Search/Find
Click the Jump to schedule c link or the Go to Schedule C button
Begin navigating through the prompts to enter the Form 1099-MISC and any business related expenses.

P

PhyllisGAnswer

Because your wife received a Form 1099-MISC with Box 7 completed, she is considered an independent contractor as it relates to the bonus.

She will need to complete a Form 1040 Schedule C or C-EZ. (TurboTax will determine the applicable form once she begins entering her information). She should claim any business expenses related to the bonus no matter how minimal. She may also be subject to self-employment tax if her net self-employment income is $400 or more.

To begin entering the information in TurboTax, she will need to:

Type Schedule C in Search/Find
Click the Jump to schedule c link or the Go to Schedule C button
Begin navigating through the prompts to enter the Form 1099-MISC and any business related expenses.