My son did a "Research Experience for Undergraduates" internship at Binghamton University last summer.
He got a 1099-MISC with the $5,500 stipend reported in box 3 "Other Income."
He's using TurboTax Free Edition and we cannot figure out how to report the stipend in such a way that he doesn't end up owing $600+ dollars of federal tax!
Thanks
If the stipend amount is reported in Box 3 of the 1099-Misc, it is not considered Self-Employment Income; however, it is still taxable as 'Other Income' unless Education Expenses are claimed against the income.
Click this link for more info on Taxable Scholarship Income.
Thank you! Follow on question...since his total income from college job and the stipend was less than $7,000, does he even need to file?
No, he is not required to file with Earned Income less than $12,200.
No, if you consider his 1099-Misc income as Earned Income. Click this link for more info on Filing Requirements for Dependents.
Hi. My daughter is having almost exactly the same problem this year, but Turbo Tax keeps trying to treat this as a "business income" entry so she gets a Schedule C and required entry for business code and business name, etc. Like Paul last year, is she just better off not filing taxes since her total income was under $12,000? The frustration level with TT is nuts!
If her income is under $12,550 and she is not a dependent*, she is not required to file. However, if she has withholding, she would wish to get that back. If this is her only income and it's reported on a 1099-MISC, she need not file.
*Single dependents— You must file a return if any of the following apply.
1. Your unearned income was more than $1,100.
2. Your earned income was more than $12,550.
3. Your gross income was more than the larger of— a. $1,100, or b. Your earned income (up to $12,200) plus $350.