Required Internship 1099 NEC

Forum|Forum|2 years ago
March 31, 2024
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My son completed a college internship required of his degree plan. The company he interned with sent him a 1099 NEC showing compensation of less than than $10,000. When I enter the 1099 NEC into TurboTax it treats him like he is a business showing he owes taxes. Is this correct?

Since this internship was away from home and school, there were more expenses than income related to the required internship. Is the a avenue to offset the tax with the expenses?

Other

Hal_Al

Employee

Q. When I enter the 1099 NEC into TurboTax it treats him like he is a business showing he owes taxes. Is this correct?

A. Yes. The IRS considers anything on a form 1099-NEC to be self employment income. Enter the 1099 income, at 1099-MISC and Other Common income / income from a 1099-NEC . TurboTax (TT) will complete Schedule C 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 $432. These types of payments are frequently done this way. Your "employer" is not the only one.

Q. Since this internship was away from home and school, there were more expenses than income related to the required internship. Is the a avenue to offset the tax with the expenses?

A. Probably not. Living expenses (housing and food) are not deductible nor is commuting (transportation) to get to work daily. Only expenses directly related to work would be deductible.

yadnomAuthor

If the internship is required to be a business, the work required was 250 plus miles away from where the business is established. Then why can he not deduct the per diem for travel?

If I do this, his business has a loss for the year.