Q. What are our options now?
A. Option #1 is write a check to the IRS for the amount shown on the IRS notice and get it over with.
As others have explained, your employer did it wrong, either on purpose, to shift his half of the FICA burden to you, or just not knowing any better. You failed to report the 1099-NEC, in the manner to get TurboTax to calculate the self employment tax (essentially both halves [employer & employee] of FICA).
Option #2: discuss it with your employer to see if they will get involved to straighten it out. The simple solution: you pay the extra tax and they reimburse you (probably half). Even on a W-2, you pay half the FICA.
That said, IRS notices, with a bill, are sometimes wrong. Preparing an amended return, to compare to the bill, before paying it, is recommended.
