First time receiving a 1099-NEC after college credit internship - confused about how to report it

You're definitely in a common situation that confuses a lot of students! When you receive a 1099-NEC (Non-Employee Compensation), it means the organization didn't classify you as an employee but rather as an independent contractor. Even though this was an internship for college credit, the fact that they paid you means there are tax implications. Yes, you will need to report this income on Schedule C (Profit or Loss from Business) and you will likely owe self-employment tax on these earnings. The self-employment tax covers your Social Security and Medicare contributions (which would normally be partially covered by an employer if you were a W-2 employee). The good news is you can deduct any business expenses related to this work - supplies you purchased, mileage driving to and from the elementary school, etc. This can help reduce the taxable income and therefore the taxes you owe.

I was in almost the EXACT same situation last year with my graphic design internship! They paid me about $3200 and sent a 1099-NEC which totally threw me for a loop. I struggled with figuring it all out until I found this AI tax assistant at https://taxr.ai that literally saved me hours of confusion. I just uploaded my 1099-NEC and some other docs and it analyzed everything - told me exactly how to file as an "independent contractor" even though I was just an intern, which deductions I qualified for (like my design software and even part of my laptop), and calculated my self-employment tax. It spelled out step-by-step how to handle everything in FreeTaxUSA too. The best part was I could ask specific questions about my situation and get instant answers instead of trying to interpret generic IRS info. Definitely helped me avoid some mistakes I would've made trying to figure it out myself!

I was initially skeptical about AI tax tools but I ended up using taxr.ai for my situation last month after reading about it here, and it was actually super helpful. I had a mix of W-2 income and a 1099-NEC from a side project, and didn't know how to handle all the different forms. The system asked me questions about my specific situation and then created a personalized guide that walked me through exactly what I needed to file. It explained the self-employment tax calculation in a way that actually made sense to me, and identified some deductions I had no idea I qualified for! For the 1099-NEC specifically, it showed me exactly where to enter everything in my tax software and how to fill out the Schedule C correctly. Saved me from paying my accountant friend $150 to do it for me!

Just wanted to say I feel your pain! Spent THREE DAYS last year trying to get through to the IRS to ask about my 1099-NEC situation (had multiple ones from different gigs). Literally impossible to reach anyone - kept getting disconnected or waiting for hours. Finally found this service called Claimyr (https://claimyr.com) that somehow gets you through the IRS phone queue. Sounds fake but there's a video showing how it works: https://youtu.be/_kiP6q8DX5c I was connected to an actual IRS agent in about 15 minutes who walked me through how to properly report multiple 1099-NECs and explained which expenses I could legitimately deduct. They even helped me understand the estimated quarterly tax payment requirements so I wouldn't get penalties. If you're completely stuck and need to actually TALK to someone official about your specific situation, this was way better than trying to interpret confusing info online.

Ok I need to apologize to the commenter above. I was the skeptical one about Claimyr and decided to try it out of desperation yesterday because I needed clarification on reporting my 1099-NEC income from three different sources. Honestly shocked that it actually worked. I got a call back in about 35 minutes and was connected directly to an IRS agent. The agent walked me through exactly how to report multiple 1099s correctly and explained which form (Schedule SE) I needed to calculate my self-employment tax. They also showed me how to estimate how much I should set aside for quarterly tax payments this year to avoid penalties. Painful conversation (I owe more than I thought) but at least now I'm not guessing about what to do. The time saved was definitely worth it for something this complicated.

Something nobody has mentioned yet - you might ACTUALLY be misclassified as a contractor when you should have been an employee, which is pretty common with internships. If the daycare was controlling when and how you worked (specific hours, supervision, using their equipment, etc.), you might have legally been an employee. If that's the case, they should have given you a W-2 and paid half of your Social Security/Medicare taxes. By giving you a 1099-NEC, they're making YOU pay the full self-employment tax (15.3%) instead of the normal 7.65% that employees pay. You could potentially file Form SS-8 with the IRS to determine your correct classification, but honestly for a short internship and relatively small amount, it might not be worth the hassle.

Quick question about this whole 1099-NEC situation - does it make more sense to use TurboTax or H&R Block when you have one of these forms? I'm in the same boat but haven't started my taxes yet.

Hey! I went through this exact situation with my education internship last year. The fact that you received a 1099-NEC means you're considered an independent contractor for tax purposes, even though it was an internship for college credit. This is actually pretty common with paid educational placements. A few key things to know: - Yes, you'll need to file Schedule C and pay self-employment tax (about 15.3% on your net earnings) - BUT you can deduct legitimate business expenses like mileage to/from the school, any supplies you bought for the classroom, etc. - Keep good records of any expenses related to this work For the financial aid question - this income will count toward your AGI, which could potentially affect your FAFSA calculations for next year, but $2,800 likely won't have a huge impact. Since you're already using FreeTaxUSA, they have good guidance for Schedule C. Just make sure to answer "yes" when they ask if you're self-employed (even though it feels weird!) and enter your teaching assistant work as your "business." The good news is this is totally manageable, and lots of students deal with this same situation. You've got this!