I was told this method of filing it under misc income would make the IRS question it. There is an option to click after entering the 1099-NEC that says “This is not money earned as an employee or self-employed individual, it is a sporadic activity or hobby”. By checking this, it categorizes the income as “other income” and does not prompt me to start a Schedule C. I do not know if this would apply to my situation.
I was also told that the Schedule C ensures that all portions of the Medicare and SS that would normally be paid for by the employer and employee are accounted for. Basically, making me pay twice.
I found this information “If you work for an employer, you and your employer each pay a 6.2% Social Security tax on up to $147,000 of your earnings. Each must also pay a 1.45% Medicare tax on all earnings. If you're self-employed, you pay the combined employee and employer amount.”
If the IRS is saying that by having the 1099-NEC, I need to make a Schedule C to ensure that both payment are made, I’m unsure that this can be filed under Misc. income.
Another forum with a similar situation brought this to light. It just all seems rather confusing for a simple salary supplement/stipend.
