Filing 1099-MISC for Federal Government Internship - Confused and Panicking

Thanks for the quick response! So even though I was just an intern, I still need to file it as if I was running a business? That seems so weird for a government internship. Would transportation to the office count as a business expense? I spent about $380 on bus passes to get to the internship.

Yes, you still need to file Schedule C even though you were just an intern. The government classified you as an independent contractor rather than an employee - it's about the tax classification, not your job title. Transportation from your home to your regular work location is generally considered a non-deductible commuting expense, unfortunately. However, if you had to travel between different work sites during your internship, that travel would be deductible. Any supplies or equipment you had to purchase specifically for the internship could also be deductible.

How does it handle the Schedule C part? I'm in a similar boat with a government fellowship that sent me a 1099 and I'm confused about how to categorize everything.

Does it actually generate the forms for you or just give advice? I'm always skeptical about these AI tax tools - do they actually understand the tax code enough to be reliable?

It handles Schedule C by asking simple questions about your work situation and then mapping your answers to the correct tax forms and categories. It doesn't use complicated tax jargon - just asks about what you did and what you spent money on. It does both - provides advice on what you can claim and helps complete the actual forms. I was skeptical too, but it's built on tax code regulations and verified by tax professionals. It's not just making guesses - it follows the same rules a human tax preparer would, just without the hourly fees. I found it especially helpful for situations like contract work where the regular tax software asks business questions that don't really apply.

How does this actually work? I thought there was no way to skip the IRS wait times since everyone has to call the same number.

Yeah right. Nobody can get through to the IRS these days. Their hold times are legendary - I don't believe for a second that any service can actually get you through faster. Sounds like a scam to me.

It doesn't skip the line - it waits in the phone queue for you. Their system uses automated technology to stay on hold instead of you having to do it personally. When an IRS agent finally answers, their system calls you and connects you directly to the agent. You don't have to spend hours with your phone to your ear. I was skeptical too! I've tried calling the IRS multiple times and either couldn't get through or had to waste an entire morning on hold. With Claimyr, I just entered my number, they called me back about 3 hours later when they reached an agent, and I was talking to a real IRS person within seconds. Not a scam - just clever technology that saves you from having to personally wait on hold.

Oh no, I didn't realize I'd owe self-employment tax too! How much should I expect to pay roughly on $4,800? I haven't saved anything specifically for taxes since this is the first I'm hearing about this.

For $4,800 in 1099 income, you'll owe approximately $735 in self-employment tax alone (15.3% of your net earnings). Then you'll also owe your regular income tax on top of that, which depends on your tax bracket and other income you might have. If this is your only income for the year, some of it might be offset by your standard deduction, but you'll definitely still owe the self-employment portion. There's a small deduction for half of your self-employment tax, but you'll still need to prepare for a tax bill. Consider making an estimated tax payment if possible to avoid underpayment penalties.

I used FreeTaxUSA last year for a very similar situation (research stipend on 1099-MISC). Federal filing WITH Schedule C was completely free. State filing was $14.99, but that was it - no surprise upgrades or "premium" features needed for the 1099 income. Their interface for Schedule C was actually pretty straightforward too.