Question

Where do I enter my child’s FFA expenses for their projects on their taxes. Their expenses exceed the 1099 misc income they earned from HLSR & their local FFA

Forum|Forum|5 years ago
March 29, 2021
3 replies
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Sold a pig, bought a new pig and a steer. Also received calf scramble purchase $$ towards steer

TurboTax Premier Online

Per IRS Pub 225 page 79
https://www.irs.gov/pub/irs-pdf/p225.pdf

4-H Club or FFA project.

4-H Club or FFA project.If an individual participates in a 4-H Club or National FFA Organization (FFA) project, any net income received from sales or prizes related to the project may be subject to income tax.

Report the net income as “Other income” on Schedule 1 (Form 1040), line 8. If necessary, attach a statement showing the gross income and expenses.

The net in-come may not be subject to SE tax if the project is primarily for educational purposes and not for profit, and is completed by the individual under the rules and economic restrictions of the sponsoring 4-H or FFA organization. Such a project is generally not considered a trade or business. For information on the filing requirements and other tax information for dependents, see Pub. 929

Enter as "Less Common Income",
Miscellaneous Income,
Other reportable income
Any Other Taxable Income - YES,
Description - enter "4H or FFA project proceeds after expenses"
Enter - amount

You will need to print and mail the return to attach the income and expense statement..

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

macuser_22

BTW - that can only go on the child's own tax return - not yours.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

T

TXcrude

Besides the expenses for feed and supplements could you also claim the mileage/fuel and tolls for once or twice daily drives to the barn? 28 miles round trip and $1,62 x 2 per day?

What about entry fees for livestock shows and associated cost of travel including hotels?

M

MonikaK1

You can deduct as charitable contributions certain travel, mileage, and fees if you incur them in the course of giving services to a charitable organization. See IRS Publication 526 (excerpts below) and this TurboTax tips article for details.

You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. You can't deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance.

If you don't want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution.

You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate.

Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a qualified organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. This applies whether you pay the expenses directly or indirectly. You are paying the expenses indirectly if you make a payment to the qualified organization and the organization pays for your travel expenses.

Amounts you spend performing services for a charitable organization may be deductible as a contribution to a qualified organization. If so, your deduction is subject to the limit applicable to donations to that organization. For example, the 30% limit applies to amounts you spend on behalf of a private nonoperating foundation.

If you give services to a qualified organization and have unreimbursed out-of-pocket expenses, considered separately, of $250 or more (for example, you pay $250 for an airline ticket to attend a convention of a qualified organization as a chosen representative), related to those services, the following two rules apply.

You must have adequate records to prove the amount of the expenses.
You must get an acknowledgment from the qualified organization that contains:
- A description of the services you provided,
- A statement of whether or not the organization provided you any goods or services to reimburse you for the expenses you incurred,
- A description and a good faith estimate of the value of any goods or services (other than intangible religious benefits) provided to reimburse you, and
- A statement that the only benefit you received was an intangible religious benefit, if that was the case.

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T

TXcrude

TurboTax will not let me enter any information on Schedule 1 Line 24z Other Adjustments. I guess I need to use the paper forms for 1040 and Schedule 1.

If I enter the information from form 1099-MISC I am not able to modify it. The only option is to put '0' in on Schedule 1 (Form 1040), line 8z which then would not match the 1099-MISC.

I have to file this return by mail in order to attach a statement showing the gross income and expenses. (see below).

I am worried that if I file without payment the IRS will charge a penalty if they do not agree. If I submit a payment I am not sure we could get it refunded. Calling the IRS help line as of no use as they did not address the specific situation and repeatedly stated 'I would advise you to pay the taxes due before April 15'

My daughter also had a part time job at a grocery store but when I put only the W-2 (~ $3800) info she does not owe any taxes. However, when I add the 1099-MISC (~$1,400) it shows $101 due.

"4-H Club or FFA project. If an individual participates in a 4-H Club or National FFA Organization (FFA) project, any net income received from sales or prizes related to the project may be subject to income tax. Report the net income as “Other income” on Schedule 1 (Form 1040), line 8z. If necessary, attach a statement showing the gross income and expenses. The net income may not be subject to SE tax if the project is primarily for educational purposes and not for profit, and is completed by the individual under the rules and economic restrictions of the sponsoring 4-H or FFA organization. Such a project is generally not considered a trade or business."

M

MonikaK1

In order to report 4-H income reported on a 1099 but for which you incurred expenses:

If you are using TurboTax Online, you can enter the 1099-MISC as Less Common Income, Other Reportable Income. Then, enter a second item in that section with an explanation and enter the same amount (or less, if the expenses were less) as a negative number.

However, if you already got the benefit of deducting the expenses related to the income as charitable contributions, then don't deduct them again on Schedule 1.

If your daughter had a Form W-2 from a job, she should file her own return. If her income is less than the filing requirement for a dependent, and there was no withholding, then she doesn't need to file. If there was withholding, she should file in order to get the withholding back.

A dependent child who has earned more than $13,850 of earned income (tax year 2023) typically needs to file a personal income tax form. Earned income includes wages, tips, salaries, and payment from self-employment. This threshold increases to $14,600 for 2024.
A dependent child who receives more than $1,250 in investment income in 2023 ($1,300 in 2024) is required to file a tax return. Investment income includes interest and dividend payments.

See this TurboTax tips article for more information.

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