OT-SORT OF-OUR MILITARY AT WORK

[AnnieR]

Client's son, who is in the military in Egypt, received a 1099MISC from a company called Document and Packaging Brokers, Inc. in Pelham, AL. He could not imagine why he got this, never heard of the company, and there is $3000 in Box 7. His mother and I could only come up with a theory that someone else was using his SS#, so she called the phone # on the 1099. Guess what...it's his BONUS for 3 friends signing up with the military at $1000 each. Now the kid has to pay SE tax on that? Sorry if I sound a little p-off...but I am. What goes through your minds?

AnnieR

[BulldogTom]

My first thought is SS8. You want to have some fun and drag the military and the IRS into a fight over his status as an employee? I would, just for the fun of it. Then I would write a diary of everything that happens in the process, and give the diary to a newspaper reporter in the client's hometown.

But, that is just me.

Tom

Lodi, CA

[Kea]

They are not in the business of recruiting their friends. I would put it on line 21 with no SE tax. I would treat the same was as a car salesman's "spiff."

[TAXBILLY]

Agree with Kea.

taxbilly

[OldJack]

Agree with Taxbilly.

[Bart]

Agree with Taxbilly.

Agree with OldJack (which I do most of the time)

[kcjenkins]

Well, if it makes you feel better, the way the National Guard does the same thing is to issue a W-2, with the $1000 in Box 1 only. Which is the right way to do it, because it is taxable but not subject to payroll taxes. To avoid a CP2000 IYou could put it into a Sch C-EZ, then take it back out on the Expense line, then enter on Line 21. Or just put in the 1099Misc, but check the box on it to send it to line 7.

[AnnieR]

Thanks everyone, I really like Bulldog Tom's idea, but won't get that involved. It just makes me angry that these kids aren't told that this is taxable and when they get a 1099 from a company they never heard of, and are left to try to figure it out for themselves. Why doesn't the military just issue them a 1099 or add it into their W2, not try to hide where it came from?

Ok, I'm done for now and Tom if it was my kid I'd use your idea.

AnnieR