by Independent Tax Preparer Deborah Ritz
My husband received a 1099-Miscellaneous for the fee he received as executor of his mother’s estate.
The tax preparer we took our information to told us this was taxable as self employment and subject to social security and income tax.
If that is the case, can we deduct the expenses we incurred while he was settling his mother’s estate?
Answer: Basically, if the fee was received as payment for the service of executor and the receiver is not in the business of performing executor duties for a living, the fee is not considered self employment and is reported on line 21 (other income) and not subject to self employment tax.
The expenses can be deducted in the year the income is received on Schedule A – Miscellaneous Deductions.
The self employment question is usually avoided if the income is reported in Box 3 “other income” instead of Box 7 “nonemployee compensation.”
Check your 1099-Miscellan-eous. If the income is in Box 7, contact the issuer of the 1099-Misc. and ask for a corrected form moving the figure into Box 3.
This will eliminate the confusion between income and self employment income.
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What is the fastest way to get a refund?
Answer: The fastest way to get your refund is to combine e-filing with direct deposit.
The IRS’s estimated turnaround time is 10 to 21 days from the filing date if there are no questions on the return.
New York state’s estimated time is 14 to 21 days in most cases, but only if your federal return is accepted.
You will have to provide your bank’s nine-digit routing number and your checking or savings account number on the return you are filing.
If it is a checking account, the routing number will be on the bottom of your checks. The bank can provide your savings account routing number.
Your checking account number will also be on the bottom of your check and savings account numbers are usually on preprinted deposit slips, your passbook or other bank records.
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Questions for Deborah Ritz can be e-mailed to WeeklyADK
@yahoo.com
