The IRS considers anything in box 7 of 1099-MISC to be self employment
income. TurboTax (TT) will complete Schedule C or C-EZ for you and allow you
to deduct any expenses associated with this income. You'll also have to pay
self employment tax (social security & Medicare) on any profits greater
than $400. These types of payments are frequently done this way. Your
"employer" is not the only one.
The IRS also considers undocumented cash income (no W-2 or 1099-MISC), for
work performed, to be self employment income.
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