topic 1099-MISC summer internship in Education

1099-MISC summer internship

phillyguy — Fri, 17 Apr 2020 12:48:27 GMT

My daughter got a 1099-MISC for a summer internship for $4300 and she also has a W2 for $1800. After entering the 1099-MISC information I get different results based on how I answer the question about intent to earn money. If I answer "No", then TurboTax says calculates no Federal Tax, and if Yes then there is a federal tax of $608 and I have to fill the schedule C. All the online places I checked say to answer "No" to the intent question. Can I get some clarity on this option

Re: 1099-MISC summer internship

AnnetteB6 — Fri, 17 Apr 2020 13:14:49 GMT

If she was working a summer internship, then she was intending to earn money doing so by performing services for the company and getting paid in return.

Answering no to the question about whether there is intent to earn money would apply in a situation where the payment was made as a prize or lawsuit settlement, something for which there was no service or work provided.

When you check the box that there was an intent to earn money, the tax being calculated is self-employment tax -- Social Security and Medicare.

@phillyguy

Re: 1099-MISC summer internship

Hal_Al — Fri, 17 Apr 2020 13:26:25 GMT

The IRS considers anything in box 7 of 1099-MISC to be self employment income. Enter the 1099-Misc income, at Other Common income / income from a 1099-MISC . TurboTax (TT) will complete Schedule C or C-EZ for you and allow you to deduct any expenses associated with this income. These types of payments are frequently done this way. Your "employer" is not the only one.

The $608 is all self employment (social security and medicare) tax. None of it is income tax.