I referred two friends who enlisted in National Guard last year and I received a referral bonus of $2K each. The $4K was not included on my W-2, but instead I got a 1099-Misc from something called "Documents and Packaging Brokers, Inc". The $4K was listed as non-employee compensation. How do I handle this on my tax return? I am having trouble getting TurboTax to handle this information properly. It wants to handle it as business income and I would be taxed at a higher rate than regular salary. Has anyone had any experience with this? Any help appreciated.

It's classified as "Compensation", and must be reported as 'fees' as Self-Employment Income.

Use IRS Schedule SE (Form 1040) to figure your self-employment tax.


Scroll down to page 88, third column on the right.

Nonemployee Compensation


Edit: I just went back and checked my TT and if you Click on "Open A Form," scroll (almost half way) down, locate and open Schedule SE, and read Line 1 VERY CAREFULLY.

Hope that helps! Get back to me and let me know how it worked out for you, okay?

This message has been edited. Last edited by: usmcvet,