My client negotiated a retirement buy-out from his employer. As part of his compensation his former employer paid for medical and health care which is reported on form 1099-misc in box 6.
Proseries entries require linking this payment to a Sch C, which is not appropriate since he is retired. How else should this payment be entered?
Best Answer Click here
This discussion has been locked. No new contributions can be made. You may start a new discussion here
I would
I would
This: "As part of his compensation his former employer paid for medical and health care which is reported on form 1099-misc in box 6."
Should have been issued to the Doctor, and the Amount would be part of the W2, if it is to be considered part of compensation for the employee.
You can ask the employer to correct all of that.
In this other topic, you asked again, but a bit differently:
You explained the payments are Medical Insurance Premiums.
All of this was done wrong by that employer.
This is playing the game of "trick the IRS computer." I would first explain to the client that the employer screwed up, and perhaps if asked nicely could issue a corrected 1099 showing zero compensation. Who knows, the employer might actually be interested in doing the right thing. Box 6 is obviously the wrong thing for anyone able to read instructions in English. Or, you can keep charging more for tax return preparation each year and hope the IRS computer doesn't select the return for audit based on strange numbers.
But why report the payment as "other income"? It's apparently a Health Reimbursement Arrangement -- see Notice 2002-45. Nontaxable.
You have clicked a link to a site outside of the Intuit Accountants Community. By clicking "Continue", you will leave the community and be taken to that site instead.