Taxable Board of Director fee

[Colmatt]

Received 1099-NEC for $1500 which was a board of director stipend. Can it just be "Other Income" or does it have to go to a schedule C? 

Thanks

[Terry53029]

I would put it on other income. on the 1099NEC worksheet there is a box to check other income. If it were a larger amount it should go on C and pay se tax. 

[sjrcpa]

@Terry53029 You're basing the decision on whether it is subject to SE tax on the amount?

[Terry53029]

I am aware that director fees are subject to se tax, but on such a  small amount I wouldn't bother with a C.

Maybe if client were receiving every year I might use a C 

[Colmatt]

They will be getting every year so I'll do the schedule C.  Given it's going there will it be 199A eligible?

Thanks for the help..  

[Terry53029]

Maybe maybe not. To qualify for the QBI deduction, your business must meet certain requirements. First, it must be a trade or business under section 162 of the tax code. This includes businesses such as sole proprietorships, partnerships, S corporations, and trusts and estates. If he is on board of directors of a c corp probably not. 

[pamdory]

On the Misc. Income screen 14.1>Alimony  Other Income, about halfway down, there is a field for "Other Income subject to self-employment tax".  I usually enter these types on income here with a description.

[BobKamman]

For those requiring further proof of IRS schizophrenia:  Page 29 of the 1099 instructions tell you to put director fees on a 1099-MISC.  But Page 27 tells you to use 1099-NEC.  

[pamdory]

"But then you can't screw the client out of an extra fee for that form."

 You can always adjust your charge for Sch SE.  

[BobKamman]

I removed that comment because it looks like IRS wants a Schedule C for anything subject to SE tax.  Because the trained monkeys at the Service Centers can't figure out where to find 1099 income, otherwise.  I would tell a client to jump through their hoops if expecting a refund, but to avoid additional work if there is a balance due on the return.  Especially if the amount of tax involved is below the CP2000 criteria.  

[Colmatt1]

I forgot about that line item. Very helpful thanks. 

[Colmatt1]

Good point. Let’s make it obvious and just use the C. 

Thanks

[abctax55]

FWIW - in past years Lacerte would not include the "income subject to SE tax" entered on Screen 14 in the QBI calculations.  I haven't looked at it for 2022, yet.

[taxes96786]

So, the way you report it, are you filing an SE form?  If not, I think this could be considered a fradulent return of some sort.

[Colmatt]

Yes I am, thanks