I am an undergrad college student, earning $3,000 from campus job during 2017. An internship in another state, New Mexico, paid $6,000, but I am still below the amount for having to file a federal return. No taxes were taken out of my internship income. $131 taken out of my campus job earnings. I want to file federal return in order to get back $131. When entering the 1099-MICS for $6,000, suddenly my return shows that I owe over $437. #1 - Is there a way to enter the 1099-MISC so I can get my $131 back and owe nothing? #2- Do I even have to enter the 1099-MISC?? #3- Will I have to pay state tax to New Mexico?
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The IRS has copies of your 1099-Misc forms. If you do decide to file a return, you should include them.
If the income on the 1099-Misc is reported in Box 7, 'Nonemployee Compensation' it appears you were a contract employee and would report the income as self-employment income. You could be assessed Self Employment Tax (same as Social Security taken out of W-2 wages) which would go into your social security account.
When entering the 1099-Misc in TurboTax you are given the option to choose 'this work is unrelated to my regular job' and 'there was no intent to earn a profit'; however, the income would still be taxed as 'other income' and added to your W-2 wages, and you may still owe both Federal and State tax.
If you report it as self-employment income, there are many expenses you can claim related to this income that you may want to consider. You can have a negative amount of self-employment income if your expenses exceed your income, or you could have $0 income if your expenses equal your income.
Click the link for some good tips for self-employment you may find helpful.
The issue is whether or not the internship stipend reported in box 3 of a 1099-Misc is EARNED? If not, and you are claiming your child student on your tax return, Turbo tax only gives the student am $1,100 standard deduction...MUCH LESS than if he/she were reporting it as earned income (in this case, the student made $7,300).
So - should money from a student internship be considered EARNED? If I say no - this student owes $623 Federal tax. IF I say yes, he owes $0!!
So when it walks me through all this self-employment stuff.. am i claiming myself as a business? I'm so confused by all of this its asking me when it was first established.
Dennis, I have the EXACT same issue. I believe it should be reported as earned income, but I'm unable to find a way to report it as such. Were you able to find a way to report the 1099-MISC form under earned income?
@Dennis 2000 and @cwmc Stipends are "taxable income" but not "earned income."
ITG FAQ #2 Answer-What income is considered earned income?
What is a Stipend: Everything You Need to Know
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