Category: Tax Questions
Statutory Employee Income
If a taxpayer receives a Form W-2 marked as a Statutory Employee in box 13, you will need to make two entries in the TaxSlayer Pro program. Enter the Form W-2 in the Form W-2 entry menu. Make sure that you place a check mark in the Statutory Employee box in box 13. When you have completed the Form W-2 entry, exit out to the main menu of the tax return (Form 1040).
To display instructions for entering a Schedule C entry in the tax program click here.
Statutory income reported on Schedule C. The statutory employee can deduct their trade or business expenses from the earnings shown on Form W-2. Earnings as a statutory employee are reported as income on line 1 of Schedule C (Profit or Loss From Business) or Schedule C-EZ (Net Profit From Business). A statutory employee's business expenses are not subject to the reduction of 2% of their adjusted gross income.
- 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.