The IRS considers anything on a form 1099-NEC to be self employment income. Enter the 1099 income, at Other Common income / income from a 1099-NEC . TurboTax (TT) will complete Schedule C for you and allow you to deduct any expenses associated with this income. You'll also have to pay self employment tax (social security & Medicare) on any "profits" greater than $432. These types of payments are frequently done this way. Your "employer" is not the only one.
You may have to upgrade to the Self Employment version of TT. If you have no expenses to deduct, there's a chance you may be able to use TT Deluxe or Premier. Enter your income at the 1099-Misc screen (even if you didn't get a 1099-misc).
In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
-Scroll down to:
- Other Common Income
-Income from Form 1099-NEC
There is a way to contest the “employer’s” classification of you as a contract employee (self employed). That is to pay your share of the Social security/medicare tax on form 8919. In TurboTax, after you enter your 1099-NEC, select "My employer reported this extra money on a 1099-NEC but it should have been reported on a W-2" from the drop down list at the "Does one of these uncommon situations apply" screen.
You also have to submit form SS-8 and the IRS will determine whether you or the employer pays the employer portion of the SS tax. You will probably also upset your employer, because the IRS may contact him about whether or not he properly paid wages.
Form SS-8 is not in TT but is here ===>>> http://www.irs.gov/pub/irs-pdf/fss8.pdf
See this IRS site ===>>> http://www.irs.gov/taxtopics/tc762.html
