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4 Answers

Paid Internship 1099-misc taxed?

Asked by: proffr 2317 views YA Discussion


I received a 1099-misc following a paid internship that I did last fall – the income was untaxed so I am supposed to pay taxes on it, understandable – but I am curious if I have any deductions/credits that I can apply to this since I paid $ 3000 in tuition to receive credit for the internship. I’m a grad student and know about the Lifetime Learning Credit, etc. but really am just curious if the 3000 can be deducted from the 1099-misc as part of the ‘gross income’ or if it has to be filed in a different category and I can use the 3000 as a deduction for work related costs, etc. The company gave me internship credit but they paid me as a “freelance” worker if that makes sense – so should I file this income as an independent contractor? I received a decent amount of pay so I am going to end up owing quite a bit in taxes for it and want to make certain I file correctly. (I will likely hire a personal accountant but want to have all the info ready before going in)

Thank you!

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4 Answers

  1. figment_usa on Feb 27, 2013 Reply

    The 1099-Misc will be filed on Schedule C, so you will owe income tax and self employment tax on the income.

    The $ 3,000 tuition you paid for the internship is the same as any other tuition you paid. You can’t deduct it as a business expense to offset the 1099 income, but you can use it toward the lifetime learning credit if you otherwise qualify.

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  2. Bobbie on Feb 27, 2013 Reply

    ORDINARY and NECESSARY business expenses with daily written records of the actual business related expense and the separate personal expense part for this purpose and time in your life.
    http://www.irs.gov use the search box for Deducting Business Expenses
    Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit.
    Independent contractors report their income on Schedule C (Form 1040) (PDF), Profit or Loss from Business (Sole Proprietorship), however you may qualify to use Schedule C-EZ (Form 1040) (PDF), Net Profit from Business (Sole Proprietorship).
    You should also be aware of Schedule SE (Form 1040) (PDF), Self-Employment Tax, which must be filed if net earnings from self-employment are $ 400 or more. This form is used to figure your social security and Medicare tax which is based on your net self-employment income.
    Use the search box at the http://www.is.gov website for Self-Employed Individuals Tax Center


    Additional Information: Use the search box at the http://www.irs.gov website for the below referenced items
    Publication 334, Tax Guide for Small Business
    Tax Information for Businesses


    Hope that you find the above enclosed information useful. 02/26/2013

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  3. Mark M on Feb 27, 2013 Reply

    Normally you add in the 1099 and it is added into your gross income. You then can use the 3000 for the tax credit. The tax credit gives you more bang for the buck.

    You can also list the 1099 on schedule C as a business. You then can can subtract some expenses off the top of your gross. If all else fails, you can take a deduction.

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  4. tro on Feb 27, 2013 Reply

    this is reported on Sch C and if you had an expenses related to making that money, they can be claimed on that form
    a freelance writer? do you have writing supplies you have to provide, or whatever your job is, are there any expenses related to it
    your only tax will be your self employment tax

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