[jcage]

In trying to help my son file his '07 taxes, we ran across something
kind of curious. Using Turbotax, we entered a couple of models for how
he might report his $975 on the 1099-Misc that he received from his
college for his service through the ASB as a 'programmer' (he was a
student there). We expected a W2 but instead received this 1099-Misc.
The net difference financially appears to be his going from owing $65
if we report the income as W2 income to $190 if we report it as a 1099-
Misc. Doesn't seem right that it would have this kind of negative
impact.

Further, Turbotax seems to want to treat this as a 'business', asking
about the business name, what type of accounting (cash or accrual,
etc). Seems a bit excessive when the purpose was to help offset his
tuition and again, he was a student at this school.

Has anyone else run into this and have any advice on how to deal with
it?

thanks very much,
John

Archived from group: misc>taxes

[Paul Thomas]

wrote
> In trying to help my son file his '07 taxes, we ran across something
> kind of curious. Using Turbotax, we entered a couple of models for how
> he might report his $975 on the 1099-Misc that he received from his
> college for his service through the ASB as a 'programmer' (he was a
> student there). We expected a W2 but instead received this 1099-Misc.
> The net difference financially appears to be his going from owing $65
> if we report the income as W2 income to $190 if we report it as a 1099-
> Misc. Doesn't seem right that it would have this kind of negative
> impact.
>
> Further, Turbotax seems to want to treat this as a 'business', asking
> about the business name, what type of accounting (cash or accrual,
> etc). Seems a bit excessive when the purpose was to help offset his
> tuition and again, he was a student at this school.
>
> Has anyone else run into this and have any advice on how to deal with
> it?





Yup. College profs are too lazy and cheap to pay out their helpers as W-2
employees.

In any event, the facts and circumstances may dictate that this is a Line
21 - Other Income - type of income......in that, your son is not
self-employed in the programming business. If this is a one-time deal,
that's probably the place for it to be.

If he's going to have this type of income for the next six years while he
gets his four year degree, then maybe it should be looked at as his business
and he files a schedule C.





--
Paul A. Thomas, CPA
Athens, Georgia

[D. Stussy]

"Paul Thomas" wrote in message$IG1.4636@bignews9.bellsouth.net...
> wrote
> > In trying to help my son file his '07 taxes, we ran across something
> > kind of curious. Using Turbotax, we entered a couple of models for how
> > he might report his $975 on the 1099-Misc that he received from his
> > college for his service through the ASB as a 'programmer' (he was a
> > student there). We expected a W2 but instead received this 1099-Misc.
> > The net difference financially appears to be his going from owing $65
> > if we report the income as W2 income to $190 if we report it as a 1099-
> > Misc. Doesn't seem right that it would have this kind of negative
> > impact.
> >
> > Further, Turbotax seems to want to treat this as a 'business', asking
> > about the business name, what type of accounting (cash or accrual,
> > etc). Seems a bit excessive when the purpose was to help offset his
> > tuition and again, he was a student at this school.
> >
> > Has anyone else run into this and have any advice on how to deal with
> > it?
>
> Yup. College profs are too lazy and cheap to pay out their helpers as W-2
> employees.
>
> In any event, the facts and circumstances may dictate that this is a Line
> 21 - Other Income - type of income......in that, your son is not
> self-employed in the programming business. If this is a one-time deal,
> that's probably the place for it to be.
>
> If he's going to have this type of income for the next six years while he
> gets his four year degree, then maybe it should be looked at as his
business
> and he files a schedule C.

There's also the fact (at least historically) that some student jobs while
working for the college/university they are attending full-time are exempt
from FICA, so W-2 vs. 1099 might not make a difference. If such an
exception still exists, it will be around IRC Section 3121 somewhere. I
haven't had to deal with the issue for over a decade.