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If you have a Form 1099-MISC with box 7 completed then you are considered an independent contractor. Your nephew is required to provide a Form 1099-MISC if the recipients income is $600 or more.
You will need to prepare a Form 1040 Schedule C-EZ or Schedule C. The TurboTax program will prepare the applicable form according to the information that is entered. The questions may appear as though you owned the business, but they are related to the work that you were assigned.
Because you are considered self-employed, you can deduct business expenses (mileage, parking, etc.) related to your job that will help reduce the income earned. No matter how minimal, you should always report any expenses that will offset your income. Furthermore, you will not be subject to self-employment tax if your net income is less than $400.00.
If you believe that you were an employee, then you should confer with your nephew so that the correct information statement (Form W-2) is issued.
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[Edited February 18, 2019]
I am having this EXACT problem right now. Did you ever figure out how to resolve it?
Income reported in box 7 on a 2019 form 1099-MISC is normally considered self-employment income. As such, it is subject to a self-employment tax of about 15%, which is in addition to your normal income tax. That may be why your tax increased so much when you answered questions regarding the income reported on the form.
You may also be counting the income twice, however, so you need to check on that by reviewing your form 1040 entries as follows:
1. Find the "Tax Tools" option on your left menu bar and click on it
2. Click on "Tools"
3. Click on "View Tax Summary"
4. On the left menu bar see the option "Preview my 1040" and click on it to view form 1040 and schedule 1 to 3
If your form 1099-MISC income is reported as "other income" it would show up on line 8 of schedule 1. If it is being reported as self-employment income, it will show on line 3 of schedule 1. So, you need to see if you have entries on both those lines, if so you probably doubled up the income.
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