Hal_Al
Level 15

Education

Q. How would I file this in a way to not pay self employment tax on it? 

A. You don't.  The IRS considers anything on a form 1099-NEC to be self employment income. You had a job and your compensation is subject to social security and medicare tax (FICA tax).  Self employment tax (SET) is how contract employees  pay their SS & medicare tax.  Since your "employer" didn't  treat you as a regular (W-2) employee and withhold FICA, you now have to pay it. 

Reference: https://pocketsense.com/tax-rules-for-student-interns-13660982.html

 

There is a way to contest the “employer’s” classification of you as a contract employee. That is to pay your share of the Social security 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