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dtsykes · Apr 9, 2008, 08:59 PM

Hi,

I am an F-1 student in New York currently on OPT. I worked a few jobs in 2007, and received W-2 and 1099 Misc forms. As I understand it I need to file 1040NR, along with Schedule C. However when I fill in my earnings on the 1040NR I end up owing money, as the form does not seem to take into account the fact that non-residents are not subject to self employment tax (ie. My income on the 1099 Misc).
Please advise me on how to reconcile this.
Many thanks,
DS

MukatA · Apr 10, 2008, 01:02 AM

Your 1099-Misc income is not subject to SE tax. Most of the software do not do nonresident tax return.

dtsykes · Apr 12, 2008, 10:47 AM

Thanks. Actually I was not using any software - just filling the forms in manually. My understanding is that I include my 1099 misc earnings on a Schedule C and transfer that figure to box 13 on the 1040nr. My 1099misc earnings were more than my W2, and so on the 1040nr I end up owing taxes - which is annoying and confusing as I thought that as an NR my 'self-employment' earnings were not subject to taxes.
Last year I only filed a 1040nr-ez (and 8843), and did not include my 1099misc earnings, and got a refund. Was this a mistake? Should I be worried, especially as I am in the process of applying for a green card?
Many thanks,
D

MukatA · Apr 13, 2008, 05:56 AM

As a nonresident you pay much less tax on 1099-Misc income than a resident as you do not pay 15.4% SE tax. Yourself employed income is taxable income. You can deduct your job related expenses.
How you will treat the 1099-Misc income, read: Your U.S. Tax Return: W2 or 1099: Employee or Independent Contractor.

For 2006, yes you must report your 1099-Misc income. IRS data base has information of all the W2s and 1099s so you may receive a letter from the IRS. You will then have to pay tax due with interest and penalty.
It may be better to file amended tax return yourself.