[askmehelp725]

I currently work as a pediatric resident (in-training). As part of a contract I entered in with another hospital administration, I am receiving additional stipend income besides my salary and am receiving a 1099-MISC form for my taxes. The contract states that if I do not sign with a particular hospital at the end of my training for 2 years, I will have to pay back the entire amount given as a stipend. In an effort to reduce my tax burden, I have reduced my W2 deductions from my salaried position to zero. My questions are:

1) Is the 1099-MISC the correct form I should be receiving?
2) Are there additional deductions I should be including in my taxes?
3) I have been using TurboTax software for the past several years... would anyone going to a professional given this new situation for me.

Appreciate the help...

[MukatA]

1. The contract has no effect on the income to be reported on your 2008 tax year. Report all your W2 income.

2. If you think that you should not get 1099-misc, then discuss with your employer. Or fle SS-8 with IRS.
Form SS-8. Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Firms and workers file Form SS-8 to request a determination of the status of a worker for purposes of federal employment taxes and income tax withholding.

3. Reporting 1099-misc income: You will report your income and 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). Half of SE tax is deductible on line 27 of Form 1040. Read: Your U.S. Tax Return: Tax Filing by Self Employed Sole Proprietor or Independent Contractor