Question: I received a Form 1099-MISC with an amount in box 7, (nonemployee compensation). What forms and schedules should be used to report income earned as an independent contractor?
Answer:
Independent contractors report their income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or you may qualify to use Form 1040, Schedule C-EZ (PDF), Net Profit from Business (Sole Proprietorship).
- You should also be aware of Form 1040, Schedule SE (PDF), Self-Employment Tax, which must be filed if net earnings from self-employment are $400 or more. This form is used to figure your Social Security and Medicare tax which is based on your net self-employment income.
- You may need to make estimated tax payments. See the worksheet in Form 1040-ES (PDF), Estimated Tax for Individuals for more details on who must pay estimated tax. If estimated tax is not timely paid, you may also need to file Form 2210 (PDF),Underpayment of Estimated Tax by Individuals, Estates & Trusts.
Additional Information:
- Publication 334, Tax Guide for Small Business
- Tax Information for Businesses
- Instructions for Schedule SE (Form 1040)
- Schedule C (Form 1040) (PDF), Profit or Loss from Business (Sole Proprietorship)
- Instructions for Schedule C (Form 1040)
- Schedule SE (Form 1040) (PDF), Self-Employment Tax
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