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As a US citizen she does have to pay payroll tax on that income so she has to report it on Sch C.
As a US citizen she does have to pay payroll tax on that income so she has to report it on Sch C.
you can't. a 1099 misc is for income other than wages. if the payment was for wages, then the bank messed up and will have to correct it. what box has an amount in it.
Here is the IRS instructions -- this is only applicable for US citizens/Resident( GreenCard ) and only when residing in the USA:
If you are a U.S. citizen working in the United States for a foreign government or international organization, you must report this compensation as wages on Form 1040 and pay self-employment tax on the compensation under the Self-Employment Contributions Act (SECA). Self-employment tax is computed on Schedule SE, Self-Employment Tax, and is also reported on Form 1040. Although you are subject to self-employment tax on this employee compensation, you are not "self-employed" for any other federal tax purposes. You may not claim deductions for expenses on Schedule C and are not qualified to establish a Simplified Employee Pension (SEP) Plan and there is no allowable deduction for contributions to any such plan. Rules of contributing to SEP/IRA plans are explained in IRS Publication 560, Retirement Plans for Small Business, and Revenue Ruling 73-384 for additional information.
So the easiest way is to report the 1099-MISC on schedule-C just the gross income and no expenses. So it would compute the SECA properly and transfer everything to form 1040. I think some of the international organizations compensation may be exempt from Fed and Sate taxes ( but SECA is required) while for others they do withhold federal taxes. But I believe World Bank is one of those covered by executive order .
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