Is the IRS saying it should be self employment and you need to pay the SE taxes on it ?
If you said the amount was supposed to be wages but the employer put it incorrectly on the 1099 then is there a form 8919 ? <a rel="nofollow" target="_blank" href="https://www.irs.gov/forms-pubs/form-8919-uncollected-social-security-and-medicare-tax-on-wages">http...>
<a rel="nofollow" target="_blank" href="https://support.turbotax.intuit.com/irs-notice/audit-support/">https://support.turbotax.intuit.com/i... down for more options)
Are you eligible for the Earned Income Credit (EIC)? More wages would indicate either more or less EIC depending on where you fall on the EIC curve.
What does the rst of the IRS letter say? They are usually specific about which calculations they used.
If the first response was not accepted then I would amend the return to move the amount from line 7 to line 21 where they expect it ... doing this may change other items on the return so don't be surprised.
Then sent the amended return back with the notice for your new response ...
Click or tap a tax year for specific amending instructions.
You can report it as other income on Form 1040 line 21. Here's how to enter it in TurboTax.
· Click the Federal Taxes tab.
· Click Wages & Income.
· Click "I'll choose what I work on."
· On the screen "Your 2014 Income Summary," scroll all the way down to the last section, "Less Common Income."
· Click the Start or Update button for the last topic, "Miscellaneous Income, 1099-A, 1099-C."
· On the next screen, "Let's Work on Any Miscellaneous Income," scroll down and click the Start or Update button for the last topic, "Other reportable income."
· The next screen asks, "Did you receive any other taxable income." Click Yes.
· On the next screen, "Other Taxable Income," enter a description and the amount. Click Continue.
· On the next screen click Done.
The income will be reported on Form 1040 line 21 with the description that you entered.