1099-MISC Box 7 - Declare as Other Income?

Shame on the law firm! Since an internship is usually an entry level job requiring close supervision, she most likely should have been classified as a W-2 employee and not as a

While it's mentioned on the webpage Paul linked to, here again for emphasis is the form to file with the IRS to have them determine employee status:

Agreed. She was an employee - no doubt here.

Hi All,

Yes, I agree that my daughter should have been classified as an employee and given a W-2. However, I don't want to make an issue of this with them, as she will want to use them as an important reference.

Therefore, what I want to understand is whether or not TurboTax's classification of the income as "Other Income" due to it being a "one- time side-job" is allowable. Thanks!

Not according to the IRS guidance given in he link I provided which says, in part:

"Unless you think you were an employee, you report your non-employee compensation on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form

• You also need to complete Form 1040, Schedule SE (PDF), Self-Employment Tax, and pay self-employment tax on your net earnings from self-employment, if you had net earnings from self-employment of 0 or more."

An expensive way for a young person to learn a tax lesson or to gain a job reference. It's a sad situation seen repeatedly in the construction trades. Laborers treated as independent contractors with no withholding, no matching FICA, no workers' comp, no unemployment comp, and large uncollectible tax liens. To complain means loss of job and income.

You WANT [her] to use as a reference a LAW FIRM that can't follow the law? I think you have larger problems than how to deal with this tax error.

I have to agree with that. If a law firm either doesn't know or doesn't care enough to comply with federal law, that's not the kind of recommendation she should want.

The direct answer to your very specific question is that payment for her services is taxable compensation, not "Other Income". It goes on either a Schedule C or C-EZ.

Their decision to not issue a W-2 should not reflect on the rest of what they do, such as corporate, antitrust, immigration, civil laws, etc.

Besides, if they issue a W-2 they would just pay less to make up their portion of social security, FUTA, SDI, etc.

Perhaps not. But it does reflect a sloppiness at least. Though you're right, they may be more careful if someone is paying them $500 per hour.

If they had offered the job at the rate they would have quoted if they issued a W-2 and spend the same amount, it might have been lower than the worker would have been willing to accept.

But the correct answer is to put it on line 7 of the 1040 and follow the procedure for a misclassifed [employee] worker.

1. The "correct answer" was already provided and he responded that he did not care to use that approach and he still wanted to know whether it was other income or compensation. My answer was on point.
2. No one in this group has any idea as to what the correct answer is because no one has all the facts about the child's employment. The only statement was that she was an intern for a law firm. I can build a variety of circumstances that would not make the child a part-time employee. So while it may be likely, she has been treated incorrectly as an independent contractor, I would like more facts before making that determination.

An "intern" is not going to be an independent contractor no matter how one addresses the relationship or fills out a Form SS-8. The very name of the job indicates that such a person is going to receive signficant direction from an employer. Advising that Schedule C could apply in such a situation is itself malpractice.

1. Names of jobs have no relevance.
2. The term "intern" is not defined in labor law or the tax code.
3. You are either an employee or an independent contractor.

I once worked on assignment with a very large law firm hired to defend a corporation in an antitrust case. The law firm hired a very large number of temporary staff during the discovery phase and pre-trial. In fact, the temporary staff was larger than the permanent staff assigned by the large firm and the corporation. Some of the hires were law students on summer break. They were hired by the law firm and were referred to by the associates as "interns." Othe hires were usually referred to as temps. These workers took their direction from my team (the corporation) and not the law firm. An assignment might be something like, get me a copy of all the trial testimony and/or all depositions entered into the record for Mr. John Doe, the plaintiffs expert witness. I want it by next Monday. They received very little in the way of instructions as to how, where and when to perform the job. They were given a login ID and password to Lexis-Nexis. They could come and go as they pleased. They could do their research in any manner they chose. Some used available terminals, some used the law firm's library, others used the law library at their school. They received no benefits and had no written contract. They received a 1099.

The fact that the associates referred to these workers as "interns" doesn't make them such. It's hard to find a generally accepted definition of internship that doesn't include or imply training and supervision. I'd guess that your temp workers' SS-8 responses would differ greatly from the OP's daughter's.