Earnings as a statutory employee are reported as income in Schedule C rather than as wages on Form 1040. If a taxpayer receives a Form W-2 marked as a Statutory Employee in Box 13, you will need to enter this income in two places in TaxSlayer Pro:
- Enter the Form W-2 in its menu, ensuring "Statutory Employee" is checked in Box 13. (With this box checked, the income from Box 1 will not show as wages in the Form 1040 Income menu.)
- Enter the W-2 Box 1 income in Schedule C, Profit or Loss From Business. If you're not familiar with creating a Schedule C in TaxSlayer Pro, see here for instructions.
In the Schedule C, enter the statutory employee income from the W-2(s) here:
- Income Reported on a Statutory Employee W-2
The statutory employee can deduct on Schedule C their trade or business expenses from the earnings shown on Form W-2. Two caveats:
- Do not combine statutory employee income with self-employment income. Instead, file a separate Schedule C for each type of income.
- Do not carry net statutory income to Schedule SE. Social Security and Medicare tax should have been withheld and reported on Form W-2.
Note: This is a guide on entering statutory income into the TaxSlayer Pro program. This is not intended as tax advice.