1099-MISC for signing bonus

[eglam...@angelfire.com]

My wife got a signing bonus last year contingent upon her remaining
employed for 6 months with that company (which she has since
fulfilled). They reported it on a 1099-MISC on line 7 - non-employee
compensation, with nothing withheld from the amount. I can't figure
out how to report it on our 1040. Just fold it into line 7? Line
21? Something else?

[Paul Thomas, CPA]

<eglam...@angelfire.com> wrote

Unfortunately, as self-employment income. She did earn money for a service
(staying on the job).

--
Paul Thomas, CPA
paultho...@bellsouth.net

[eglam...@angelfire.com]

On Feb 2, 1:46 pm, "Paul Thomas, CPA" <paulthomascp...@bellsouth.net>
wrote:
> <eglamkow...@angelfire.com> wrote

> paulthomascp...@bellsouth.net

That's pretty lame.

So.... since she doesn't formally have her own business, can she
anyways take as expenses against this "income" the costs associated
with getting the job?
Which I suppose would primarily mean travel expenses.

[Phil Marti]

"Paul Thomas, CPA" <paultho...@bellsouth.net> wrote:

>> My wife got a signing bonus last year contingent upon her remaining
>> employed for 6 months with that company (which she has since
>> fulfilled). They reported it on a 1099-MISC on line 7 - non-employee
>> compensation, with nothing withheld from the amount. I can't figure
>> out how to report it on our 1040. Just fold it into line 7? Line
>> 21? Something else?

> Unfortunately, as self-employment income. She did earn money for a
> service (staying on the job).

Assuming that she's an employee of this company, she should as the employer
to rescind the 1099 and include the bonus in her W-2 wages where it belongs.
Employers should not be reporting payments to employees on 1099's. I'll
assume ignorance, but it may be that they're trying to get out of the
employer's share of FICA/Medicare.

If they won't correct things, she can report it as wages on line 7. She
owes employees' FICA/Medicare, so she attaches Form 4137, crossing out
"Tips" and substituting "Wages" in the title. Note that this action should
result in IRS contact with the employer, which might not be to her benefit.
--
Phil Marti
Clarksburg, MD

[eglam...@angelfire.com]

On Feb 2, 4:37 pm, "Phil Marti" <prm20...@verizon.net> wrote:

> "Paul Thomas, CPA" <paulthomascp...@bellsouth.net> wrote:
>
> >> My wife got a signing bonus last year contingent upon her remaining
> >> employed for 6 months with that company (which she has since
> >> fulfilled). They reported it on a 1099-MISC on line 7 - non-employee
> >> compensation, with nothing withheld from the amount. I can't figure
> >> out how to report it on our 1040. Just fold it into line 7? Line
> >> 21? Something else?
> > Unfortunately, as self-employment income. She did earn money for a
> > service (staying on the job).
>

> Assuming that she's an employee of this company, she should ask the employer

> to rescind the 1099 and include the bonus in her W-2 wages where it belongs.
> Employers should not be reporting payments to employees on 1099's. I'll
> assume ignorance, but it may be that they're trying to get out of the
> employer's share of FICA/Medicare.

The bonus was paid by a recruiting company that got her the job, not
by the company actually hired her.
Stupid tax code, so complex. Head exploding...

[Phil Marti]

<eglam...@angelfire.com> wrote:

> The bonus was paid by a recruiting company that got her the job, not
> by the company actually hired her.

Sounds like NEC to me. Report on Schedule C, with Schedule SE for the
self-employment tax.

[PaulTry]

And she should prepare and complete Form SS-8 to support her
claim that she is an employee.