How do I account for 1099-MISC, Line 3 "Other Income" from a Teach for America Stipend in the most tax efficient manner?

[joev2]

Is a Teach for America stipend treated as fully taxable income, including requiring self employed FICA and SS taxes?

[DianeW777 · Accepted solution]

It is considered 'Other' income and is not subject to social security and medicare taxes. 

This income is not business income, rather miscellaneous as indicated by your Form 1099-MISC. It's your money as a stipend not because of a service you performed.

It's important for you to select 'None of these apply" and then you should also select the following:

'No' on the screen 'Did the '____' involve work that's like your main job?'

'No' on the screen 'Did the '____'  involve an intent to earn money?'

This will report the income without any business activity and it will show up on Form 1040, Line 8 (From Schedule 1, Line 8z).

You can use the Preveiw My 1040 to see the income on the appropriate lines of your return.

Other Miscellaneous Income:

1. Sign into your TurboTax Online account
2. Go to Tax Home (left panel)  Wages and Income  section 
3. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
4. Select Other reportable Income > Enter a description (----) and the amount

1. From the left rail menu in TurboTax Online, select Tax Tools (You may have to scroll down on the left rail menu.)
2. Select Tax Tools 
   
3. On the drop-down select Tools 
4. On the pop-up menu titled “Tools Center”, select View Tax Summary 
5. On the left sidebar, select Preview my 1040 

For TurboTax Desktop, change to 'Forms' and review the forms