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I did some work for my parents business over the last year and they paid me $2400. I didn't get a W-2 or any other statement from them. They're deducting it as a professional services expense. How should I report this income?



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You need to report the item as other income on form 1040. The earnings are subject to self-employment tax which is calculated on Schedule SE. You really don't have to report the income on Schedule C unless you have some expenses that you can deduct against the income. Remember the miles to and from work cannot be used to as business miles for deduction.
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I did some work for my parents business over the last year and they paid me $2400. I didn't get a W-2 or any other statement from them. They're deducting it as a professional services expense. How should I report this income?
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Self-employment income -- that is what the $2400 is -- should always be reported on Schedule C. You can knock off any expenses to produce that income, and you will then fill out Schedule SE to figure the Self-Employment tax. Plus you will pay the regular tax on your net SE income. See p. 6 of IRS Publication for filing requirements, and get the instructions for Schedules C and SE for all the details.
HTH
--BigBunk


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No. of Recommendations: 6
You need to report the item as other income on form 1040. The earnings are subject to self-employment tax which is calculated on Schedule SE. You really don't have to report the income on Schedule C unless you have some expenses that you can deduct against the income.
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Actually, Schedule C or C-EZ should be used to report in a proper fashion any self-employment income if the gross is $400 or more. See the instructions for Schedules C, C-EZ, and SE (in Package X for example). If the gross is under $400, then you can list it simply as "Other Income" on 1040 line 21.
HTH
--BigBunk
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I did some work for my parents business over the last year and they paid me $2400. I didn't get a W-2 or any other statement from them. They're deducting it as a professional services expense. How should I report this income?

You report your self-employment income (that's what this is) on Schedule C, which feeds Schedule SE. You may want to tell your parents that they are responsible for filing form 1099-MISC and Form 1096 with the IRS, which gets very testy about business expense deductions without the corresponding information reporting.

Phil Marti
VITA Volunteer
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