As a grad student, I did a internship at a school and received stipends from a WIA grant project through the MN Valley Action Council in mankato. Is this taxable income? I received a 1099 - misc, and the stipend is in box 7 under nonemployee compensation. How do I add it to my Fed income report? If I put it under 1099 misc other income, I get defalted into sched C self employment taxes. I do not know what to do with the stipend earnings from the school I helped at. Kim

1099-misc (nonemployee compensation) income: You are self employed or independent contractor. You must file your tax return if yourself employed income is $400 or more. You will report your income and business related expenses on schedule C or C-EZ (Form 1040). Then you put net income (or loss) on line 12 of Form 1040. This income is subject to SE tax at 15.3% (this is shown on line 57 of Form 1040).

Even though schedule C treats you as a self employed, which may not be correct for you, this is how you must report this income. Your U.S. Tax Return: Tax Filing by Self Employed Sole Proprietor or Independent Contractor