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    pshottie's Avatar
    pshottie Posts: 2, Reputation: 1
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    #1

    Mar 15, 2012, 11:44 AM
    Form 1099 recd for ref, but I am unemployed. How do I get out of payiing self-employ
    Hi,
    I received a 1099 form for a referral fee last year, but I am unemployed. How do I avoid paying self-employment tax on this amount when I file my taxes?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Mar 15, 2012, 11:58 AM
    If the amount on the Form 1099-MISC is LESS than $400, you can enter it on Line #21 of Form 1040 and report it as "OTHER INCOME" with no problem from the IRS.
    pshottie's Avatar
    pshottie Posts: 2, Reputation: 1
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    #3

    Mar 15, 2012, 12:15 PM
    Thank you for you reply, but it is over $400.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #4

    Mar 15, 2012, 12:43 PM
    Okay, then, if the amount of money is in Box #7 (non-employee compensation), you MAY be stuck with completing a Schedule C.

    You can still put the income on Line #21 of Form 1040, but if the amount is a lot more than $400, the IRS may send you a letter asking you to explain the income. Referral income is NOT subject to self-employment taxes, but the IRS does NOT know it is referral income.
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