Form 1099 MISC

[Terry D EA]

Have a client that is doing educational consulting work. They received form 1099 MISC with income is box 3. In my opinion, this should have been in box 7 subject to SE tax. I am thinking to include this as SE tax income anyway. Opinions please.

[mrichman333]

Definitely belongs in box 7.  IMO they are trying to not pay SE tax and asked it be put in box 3.  I would inform the client that their income is subject to SE tax and that box 3 was incorrectly used.   If they still want to go with box 3, I'm not sure what I would do,

[Lion EA]

Your client should keep books for his business.  1099-MISC means nothing (unless it reports more than your client reports as income, then you have questions to ask your client).  Report your client's income per his books on Schedule C and use Schedule SE.

[RitaB]

1 hour ago, Terry D said:

Have a client that is doing...work.

Yep, sounds like work to me, too.

[Terry D EA]

My thoughts exactly. Belongs in Box 7. I will talk with my client. This was a drop-off so I haven't had the opportunity to speak with them yet.

[RitaB]

24 minutes ago, Terry D said:

My thoughts exactly. Belongs in Box 7. I will talk with my client. This was a drop-off so I haven't had the opportunity to speak with them yet.

I think I'd just say, "Here's the Sch C where your income from consulting goes, and here's the Form SE..."  In other words, I wouldn't discuss the Box 3 vs Box 7 with him at all. 

[Terry D EA]

Thanks Rita, that sounds to be the best way. Just right out front, here it is.