[raj71]

1. We are filing married jointly.
2. I have a regular job and get W2... no problem on that end:)
3. Spouse did consulting for a company for 2 months in year 2004 (wrote some computer
Programs from home). She got a 1099-MISC from the company she conuslted for. The income is reported on --- NonEmployee Compensation Box 7.

Where do we show this income? Turbo Tax automatically puts it in Schedule in Section C... and asks for Business Name etc. She does not own any business . The idea is to pay off the taxes on the check she got. There were no expenses doing that job.

Regards

[AtlantaTaxExpert]

Raj71:

The business name is her name. The business address is your home.

She did have expenses. I assume she wrote the computer program on a computer. If so, a prorated share of the cost of the computer, monitor, printer, computer desk and desk chair can be claimed as a legitimate business expense. If she used the Internet for research or to consult in writing the program, the same proration applies for the cost of your ISP. If she did any printing, the same proration applies for the cost of the printing cartridge and paper.

You can also write off a portion of your home if you can identify the part of the house she did the work in as a home office.

How much money are we talking about on your W-2 and her Form 1099-MISC? This is needed because she is paying income taxes at your marginal tax rate. Further, she owes 15.3% of every dollar over $400 as self-employment taxes, plus whatever the state income tax may be. Depending on your location and tax bracket, you may owe up to 50% of her 1099 income in taxes.

Depnding on how much money we are talking, you may want to see a tax pro.