Klarinet Archive - Posting 000155.txt from 1999/02

From: mark weinstein <cpaok@-----.net>
Subj: Re: [kl] Taxes
Date: Thu, 4 Feb 1999 09:36:41 -0500

Neil wrote:
>Are non-employee compensation wages -- paid by a part-time
>orchestra -- subject to self-employment tax? If so, do I
>need a schedule C, or perhaps a Form SE, in order to complete
>my 1040 correctly?

Yes they are. To be specific, first, NEC (read: non-employee compensation)
is NOT WAGES. these are contract
payments received for services rendered.

an employee gets wages. independent contractors get (NEC) contract payments.
INDEPENDENT is the key word here.

NOW, contract payments (and amounts reported on Form 1099-MISC, nee NEC) are
taxable for self-employment tax purposes
where the income LESS any related expenses equal $400 or more in a calendar
year reporting period. ie January through December.

YES, generally these payments and the related expenses are reported Form
1040, SCHEDULE C.

certain limited amounts may be placed on Form 1040, Line 21.

in anay event, the IRS has a "Matching Program" replete with "URP
transcripts" so they, say every 16-18 months or so, trya nd match the
amounts reported by Payor (and filers of the Form 1099's) to the
INDIVIDUAL's Form 1040/Income Tax return.

Fun, huh ?

Regards,
mw
****************************************
Mark Weinstein
Mark Weinstein, CPA, Inc.
6422-B North Santa Fe
Oklahoma City, OK 73116
Office: 405.848.4441
Fax: 405.848.4463
Email: cpaok@-----.net
****************************************

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