Volunteer Firefighter Stipend Taxes

[yates]

s About Taxes)/Volunteer firefighter stipend taxes Advertisement Expert: John Stancil, CPA - 2/25/2011 My son is a volunteer firefighter who receives a quarterly reimbursement based on a per-call answer rate. The city sent him a 1099-misc form; it's my understanding that he'll have to pay federal, Soc. Sec. and Medicare taxes on this. First, is this accurate? If so, should he begin paying estimated quarterly taxes? And finally, does he deduct mileage based on business or charitable rates? Many thanks in advance.

[Gurion]

Gina,

Thanks for your question.

Yes, he does have to pay income tax as well as self-employment taxes on the earnings included on the 1099-Misc.  He will report those on Schedule C and Schedule SE.  He can deduct mileage at the business rate.  Since he is, in essence, being paid he is no longer a "volunteer."

If he anticipates owing more than $1,000 he should make estimated tax payments in order to avoid a penalty.  If he does not want to owe at all when he files, he should make payments also.

Hope this helps.

John Stancil, CPA