How to handle income from paid internship over the summer?

Question

I'm a full-time college student with two sources of income in 2018: a part-time job through my college for which I have a W2 (gross wage of $5,408.65) and a paid internship over the summer for which I have a 1099-MISC (gross wage of $3,000).

The W2 job was easy enough to enter into TurboTax and I got a nice return, but I'm not sure how to approach the 1099-MISC, and whether I'm actually required to file that at all.

TurboTax made it seem like I had to upgrade to their premium service and file as self-employed, but I'm not really self-employed, and it's costing me several hundred dollars in taxes which is an enormous amount of money for a college student.

According to Table 1. 2018 Filing Requirements Chart for Most Taxpayers on the IRS website, if I'm single and under 65, I only need to file a return if my gross income was at least $12,000.

Am I interpreting this correctly? Is it possible for me to file a return on my W2 job so I get money back but omit the income from the 1099-MISC since it's under the threshold? If I do have to file the income for this paid internship, what's the best way to do so? Does a paid internship really make me self-employed?

Answer 1

No, you can't file a return and omit a third of your income.

Farther down on the page you linked, in Table 3 under "Other Situations", it says that you must file a return if:

You had net earnings from self-employment of at least $400.

So you do need to file a return, and you do owe self-employment tax on the $3000, which comes to about $425. You won't owe any income tax, and you will get back all of the withholding on your W-2, if any. (The withholding will be applied to the self-employment tax, so you only have to make a payment for the difference.)

You don't need to pay for tax software, though. Your taxes seem to be simple enough that you can just fill out the forms yourself. Alternatively, there are free filing services that you should be able to use. Look for links on the IRS website.