1099-MISC Box 7

[meat757]

My daughter is attending college. We are claiming her as a dependent, so we assume we do not enter the 1098-T in her tax return. She received a stipend for a teachers education summer institute reported to her on a 1099-MISC in box 7. After entering, her Turbo Tax return states she had self-employment income? And that she owes taxes even though her total income plus stipend is below the $6,300 standard deduction. Confused, have we entered this correctly? Thank you.

[PaulaM]

The IRS considers 1099-MISC box 7 as self-employment income (even if she was not in 'business'). This is just how box 7 is categorized. As such, the income flows through a schedule C and any income over $400 has self-employment taxes computed.

So your daughter can owe taxes (self-employment or SE taxes) even though her total income is below $6,350. Note: Because Box 7 is considered self-employment income, there are a number of expenses that she may take against the income to reduce her 'net income'. Travel expenses, materials and supplies that she may have purchased for the summer institute are some examples.

https://ttlc.intuit.com/questions/1901402-do-i-need-to-file-my-own-taxes-if-i-m-a-dependent