1099-misc

[David P Richards]

My Clint got 1099-MISC box 7 for her income She got this as a internship from a college non profit . can this be filed other pay or must file schedule C?

[Burke]

It can be listed as Other Income on Line 21, but she will still have to fill out Sche SE and pay the self-employment taxes. Your software should give you this option as to where to list it. Mine does. It doesn't matter whether the college is non-profit or not. It may matter if she is a student. See IRS Notice 2005-11.

[Rapid Robert]

I would think a paid intern, almost by definition, would be an employee. Shame on the hiring organization for not setting this worker up correctly. Taxpayer might consider filing Form 8919 along with SS-8 so as not to be liable for employer's share of FICA tax.

[Rapid Robert]

IIRC, "wages" paid to interns at certain institutions of higher learning are **NOT** subject to FICA/Medicare withholding.

I'm well aware of that, given the number of basic payroll classes I've co-presented locally on behalf of the IRS Stakeholder Liaison. There is a handy chart in one of the Pub 15-A-B series that gives details of when this applies, such as whether or not the worker has to be a full time student.

But at least you concede that it is probably wages. There is a big difference between a correctly classified employee receiving a W-2 with no Box 3 or 5 amounts, and an incorrectly classified worker receiving a 1099-MISC.

[Dude]

My Clint got 1099-MISC box 7 for her income She got this as a internship from a college non profit . can this be filed other pay or must file schedule C?

Just file the schedule C

[Burke]

Reason for listing on Line 21 and not Sche C has to do with states who check these for business taxes. Sche C implies she has a business.

[ttbtaxes]

The internship might not rise to the level of a trade or business and thus not be subject to SE tax. The July edition of the 2009 Journal of Accountancy has some good examples of what constitutes a "regular, frequent, and continuous" activity.

[Rapid Robert]

What is missing here is the notion that it is the TAXPAYER's decision how to proceed once informed of the options. Just because a preparer has bigger fish to fry or feels that just filing a Schedule C is easier, is not a reason to not offer the available options to the taxpayer, and then send them somewhere else if they want to file a return that's too complicated for you to handle.

[Dude]

What is missing here is the notion that it is the TAXPAYER's decision how to proceed once informed of the options. Just because a preparer has bigger fish to fry or feels that just filing a Schedule C is easier, is not a reason to not offer the available options to the taxpayer, and then send them somewhere else if they want to file a return that's too complicated for you to handle.

OP indicated this is an internship, maybe the intern would like to work full time for the employer one day. Maybe advising someone to tell their employer they should not be categorized as an independent contractor will cost them their job and any future opportunity to be hired as they will be deemed a troublemaker. That is the type of advice I would give

Just file the schedule C