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Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
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Experience:  Nearly 30 years of varied tax industry exp. Tax Biz owner
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Hi. I am an unemployed part time student. A company I worked

Resolved Question:

Hi. I am an unemployed part time student. A company I worked for ten years ago contacted me because it was in litigation. I knew some underlying facts and was asked to be a "fact witness". I was not an "expert witness". Periodically I was asked to look at records and documents. I was paid $125/hr to do this.

I received a 1099 stating that I was being paid as an attorney. I was not retained for legal services, carry no malpractice insurance, and my status as an attorney is "inactive". The IRS gave me an extension of time to file my return.

I know this is taxable but am unsure of the category. I have not paid any tax on this. Should I have paid SS and/or unemployment tax on this. The money was paid to me under my personal social security number. Please advise.
Submitted: 1 year ago.
Category: Tax
Expert:  Tax.appeal.168 replied 1 year ago.
Welcome. THANK YOU for choosing Just Answer. My name is XXXXX XXXXX my goal is to help make YOUR life, a little...LESS taxing.

In brief, the IRS will likely see you as an Independent Consultant. Even though your status as an attorney was inactive, you were not an employee. As an Independent Consultant, the company was not obligated to withhold any of the mandatory taxes such as SS, etc. Even though you technically do not consult as a trade or business, it will likely be in your best interest to complete a Form Schedule C, instead of reporting the income as Other Income on Line 21 of the Form 1040. From my experience, the IRS would likely consider this as self employment income rather than other income.

Link to Schedule C/instructions:

http://www.irs.gov/pub/irs-pdf/f1040sc.pdf
http://www.irs.gov/pub/irs-pdf/i1040sc.pdf

Please let me know if I can be of further assistance to you regarding this matter.

Thank you again for using JUST ANSWER.
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2522
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and 4 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Please let me know the total cost for your service. Thanks.
Expert:  Tax.appeal.168 replied 1 year ago.
Hello John,

Please clarify. Total cost of our service? If I am not mistaken, this is determined prior to a person asking a question. Honestly, I am not sure what value was selected for this question. Would you like for me to forward your inquiry about the cost to customer service?
Customer: replied 1 year ago.
So I may rate you please advise the cost. Thanks.
Expert:  Tax.appeal.168 replied 1 year ago.
John,

I apologize, but the experts are not privy to the cost value questions. Again, the value is typically determined prior to the customer being able to ask a question. I will forward this inquiry so that they can inform you what the question value is. Sorry for the confusion.

Thank you again for using JUST ANSWER.

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