Question

Why does TT assume that IF you have one 1099-NEC, that you own/run a business?

Forum|Forum|2 years ago
February 26, 2024
1 reply
0 views

I have skipped adding the Business address (this was paid from a church as a gift). It hasn't caused any problems with the IRS (so far).

Not A Product Question

O

Opus 17

Employee

Real gifts are never taxable. Why did the church pay money to you, did you perform any services for the money, and why did they feel the need to issue a 1099 of any kind, and a 1099-NEC specifically?

P

parsons-ghAuthor

They are if you are in ministry (a minister, etc.). It is from a Christmas offering for those working around the world.

Assuming a 1099-NEC is the correct form (which I believe it is), does that form automatically make TT think I have a business?? (IF I were a contractor, it would be a normal 1099.)

O

Opus 17

Employee

If you are a clergy member of the church, then any money the church directly pays to you is considered part of your wages and should be reported in box 1 of your W-2. Your employer can't give you tax-free gifts, it's just not allowed, even for clergy. Tell the church they need to cancel the 1099-NEC and issue a corrected W-2.

If you are not a regular employee of the church, you might be a self-employed missionary. The income is still taxable and a 1099-NEC is appropriate.

The way to receive a tax-free gift is to have it come directly from the parishioners or church members into your pocket, and not through the church. (However, those gifts will not be tax deductible to the giver, since personal gifts are never tax deductible.) Once the church gets involved and it goes through their bank account, it is wages.