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Where do I report nonemployee compensation?

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Question
Where do I report nonemployee compensation?

Answer

You have a 1099-MISC with income in box 7 - Nonemployee Compensation. Essentially, this means you are considered self employed for these wages. The person or company that paid you did not pay Medicare and Social Security taxes. Therefore, you are liable for Self employment tax unless this income is below $600. By entering this information in Schedule C, you are allowed to take deductions against your income and also pulls to calculate your schedule SE.

Even though you may not have "owned your own business," nonemployee compensation is considered self-employment income by the IRS. You need to answer yes to this question and enter the amount of your income on the 1099-MISC in gross proceeds. You will then be able to enter any deductions you have.

You will enter your SSN and name and address as the business unless your 1099-MISC has other information. If none of the business types match, there is a listing for Unclassified establishments (unable to classify).

Returns and Allowances refer to damaged and lost goods, sales returns, etc. This will most likely not apply to you.

This is the same for a lot of the questions on inventory and accounting method. You can enter a 0 or answer no to these questions.

If you are wanting to claim mileage, you need to enter a total in Cars and Trucks. Doing this will trigger a screen to enter your mileage information.

Once you complete your Schedule C, F, or E, you will be prompted to fill out Schedule SE information.


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Article Details
Views: 1908 Created on: Jun 15, 2013
Date updated: Dec 10, 2018
Posted in: Income

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