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457(b) 1099 Misc Reporting

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Our company provides a 457(b) plan for directors. We would like instructions on reporting the deferral on the 1099 MISC provided to the director at year end. Since the deferrals are subject to FICA/MEDICare, we didn't think we could reduce the box 7 total (nonemployee compensation). I would appreciate any information on the 1099MISC reporting for 457(b) deferrals. Thanks

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Our company provides a 457(b) plan for directors. We would like instructions on reporting the deferral on the 1099 MISC provided to the director at year end. Since the deferrals are subject to FICA/MEDICare, we didn't think we could reduce the box 7 total (nonemployee compensation). I would appreciate any information on the 1099MISC reporting for 457(b) deferrals. Thanks

 

As you are asking about the 1099misc it is assumed the directors are not employees of the NP. If the director is self employed there is no FICA/ medicare withholding by the NP and the director includes the fees paid on the 1009misc as self employment income on the 1040 Schedule SE for FICA/medicare tax. See IRC 1402(a).

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Our company provides a 457(b) plan for directors. We would like instructions on reporting the deferral on the 1099 MISC provided to the director at year end. Since the deferrals are subject to FICA/MEDICare, we didn't think we could reduce the box 7 total (nonemployee compensation). I would appreciate any information on the 1099MISC reporting for 457(b) deferrals. Thanks

 

As you are asking about the 1099misc it is assumed the directors are not employees of the NP. If the director is self employed there is no FICA/ medicare withholding by the NP and the director includes the fees paid on the 1009misc as self employment income on the 1040 Schedule SE for FICA/medicare tax. See IRC 1402(a).

 

Correct. The directors are not employees of NP. A portion of director fees are put into a 457(b) deferred income account. What we are trying to determine is where is the deferral or reduction of fees shown on the 1099. The deferral is subject to FICA/Medicare, so if we reduce Box 7, then FICA/Medicare is shorted when the director uses that figure for SE purposes.

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Our company provides a 457(b) plan for directors. We would like instructions on reporting the deferral on the 1099 MISC provided to the director at year end. Since the deferrals are subject to FICA/MEDICare, we didn't think we could reduce the box 7 total (nonemployee compensation). I would appreciate any information on the 1099MISC reporting for 457(b) deferrals. Thanks

 

As you are asking about the 1099misc it is assumed the directors are not employees of the NP. If the director is self employed there is no FICA/ medicare withholding by the NP and the director includes the fees paid on the 1009misc as self employment income on the 1040 Schedule SE for FICA/medicare tax. See IRC 1402(a).

 

Correct. The directors are not employees of NP. A portion of director fees are put into a 457(b) deferred income account. What we are trying to determine is where is the deferral or reduction of fees shown on the 1099. The deferral is subject to FICA/Medicare, so if we reduce Box 7, then FICA/Medicare is shorted when the director uses that figure for SE purposes.

 

There is no box for 457b deferrals in a 1099-misc. In box 7 enter the amount of taxable director fees paid (excluding the amount contributed to the 457(b) because that amount is not included in income). The company should provide the director with the amount deferred under the 457b plan and note that the director is responsible for reporting the amount deferred as self employment income subject to SECA tax under IRC 1402, see PLR 8819012, and the director should consult his tax advisor.

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