Hi all,
I received 1099-MISC for my research stipend (not really a salary but a fellowship paid to do research full time in 2020). I was a postdoctoral researcher (not a student).
I've tried reporting it but Turbo Tax classifies me as self-employed, and I believe I am paying too much tax on this.
How do I report it in turbotax so it's considered an academic fellowship/stipend?
My 1099-MISC form has only Box 3: Other income
Any help would be much appreciated!
Thank you very much
Eridani
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Once you enter your 1099-MISC, it is important that you answer the questions that follow the entry screen for the 1099-MISC. If answered correctly, you will also be able to have this income flow to Other Income, rather than self-employment income.
Please follow the instructions below:
Next, please confirm your 1099-MISC went to Other Income on your 1040.
If a Schedule C was populated, please delete any Schedule C forms or associated self-employment forms in your return.
Once you enter your 1099-MISC, it is important that you answer the questions that follow the entry screen for the 1099-MISC. If answered correctly, you will also be able to have this income flow to Other Income, rather than self-employment income.
Please follow the instructions below:
Next, please confirm your 1099-MISC went to Other Income on your 1040.
If a Schedule C was populated, please delete any Schedule C forms or associated self-employment forms in your return.
If you can be claimed as a dependent, by someone else, you will want to enter it differently, than how LenaH describes. Or if you want to make an IRA contribution based on this "compensation".
If so, reply back for alternate instructions.
I am filling as single. Lena's solution worked!
I am not paying the self-employment tax anymore, phew. Just the standard income tax.
Thank you SO MUCH for your help. I was a bit depressed thinking I'd have to sell my car ^^
One final question, Turbotax is showing that I need to pay:
Why is that happening?
We are in the same situation for my daughter, but I claim her as a dependent. How would we have to enter this then? Any insight is appreciated.
You do not enter your dependent's income on your return. If it has to be reported , it gets entered on her return.
The trouble with the above described way is that it is treated as unearned income, which limits the dependent's standard deduction to $1100. So, you may be better off entering it as self employment.
But if it's truly not self employment, there's third way.
Federal Taxes Tab
-Wages and income
Scroll down to:
--less common income
---Misc Income, 1099-A, 1099-C..... (Press start)
-----Select START (or update) to the 1st choice titled "Other Income not reported on a W-2....." and Continue
-------Select YES to other wages received and Continue
----------Select CONTINUE on the "Wages earned as a Household Employee" screen (enter nothing here)
--------------Select CONTINUE on the "Sick or Disability Pay" screen (enter nothing here)
-----------------Select "Yes" on the "Any Other Earned Income" screen and continue
----------------------Select "Other" on the "Enter Source of Other Earned Income" and Continue
--------------------------In Description Box type "Stipend" and the amount. Click Done.
That puts the income on line 1 of form 1040, where it is treated as earned income.
Note: income on line 1 of form 1040 without a W-2 or line 1 code is a small red flag at the IRS
If she worked for a college or non profit instead of a company, the income could be entered as taxable scholarship. Enter it in the educational expenses section, rathe than the income section of TurboTax. This still puts it on line 1 of form 1040, but with the "SCH"code.
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