If the IRS Form W-2 Wage and Tax Statement you received from your employer has the checkbox marked for Statutory employee, that income needs to be reported on Schedule C Profit or Loss from Business for Statutory Employees. If you marked the box in error, uncheck it and the wages will then be reported on Line 7 of IRS Form 1040 U.S. Individual Income Tax Return.

Enter your W-2 information in the Wages and Salaries section of the program, or directly on the Form W-2. Check the box for statutory employee under Box 13 and your wages will then automatically transfer to Schedule C.

To Review Box 13 Data on Form W-2:

  1. From within your TaxACT return (Online or Desktop) click on the Federal Q&A tab
  2. Click Wages and Salaries to expand the category and then click Wage income reported on Form W-2
  3. Click Add to create a new copy of the form or click Review to review a form already created 
  4. Click Step-by-Step Guidance
  5. Continue to the fourth screen, titled Wages - W-2 - Information, where you can check or uncheck the box on the left side of your screen below the Box 12 entries

To Enter Statutory Employee Income and Expenses:

  1. From within your TaxACT return (Online or Desktop) click on the Federal Q&A tab
  2. Click Business Income to expand the category and then click Income and Expense for Statutory Employees
  3. On the screen titled Statutory Employee, click Review for the applicable Federal Schedule C - Statutory Employee
  4. The program will proceed with the interview questions for you to enter or review the appropriate information

Additional Information

Per the IRS Schedule C Instructions, page 5:

If you received a Form W-2 and the "Statutory employee" box in box 13 of that form was checked, report your income and expenses related to that income on Schedule C. Enter your statutory employee income from box 1 of Form W-2 on line 1 of Schedule C and check the box on that line. Social security and Medicare tax should have been withheld from your earnings; therefore, you do not owe self-employment tax on these earnings. Statutory employees include full-time life insurance agents, certain agent or commission drivers and traveling salespersons, and certain home workers.

If you had both self-employment income and statutory employee income, you must file two Schedules C forms. You cannot combine these amounts on a single Schedule C.

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