I'm a college student (and accustomed to filing 1040EZs), but this year I made $1,000 in nonemployee compensation (box 7 of 1099-MISC) just from bookkeeping a few hours a month for a small non-profit that didn't want to put me on their payroll.
Can I put this on line 21 of the 1040 (other income) or am I totally screwed and have to do all the Schedule C and SE crap?
2007-04-11 17:31:23 · 6 answers · asked by city_savvy 2 in Business & Finance ➔ Taxes ➔ United States
Just to confirm--here are the instructions from the Form 1040 package for Line 21:
"Do not report on this line any income from self-employment or fees received as a notary public. Instead, you must use Schedule C, C-EZ, or F, even if you do not have any business expenses. Also, do not report on line 21 any non-employee compensation shown on Form 1099-MISC."
Many years ago, it was acceptable to show this income on line 21, and professional tax software provided the ability to treat it as self-employment income, ensuring that Schedule SE would be completed. The change was made to ensure that people did not sidestep the self-employment tax issue.
2007-04-11 21:50:57 · answer #1 · answered by byu1980 2 · 1⤊ 0⤋
Use a software program like Turbotax. You would just need to input the 1099 and code it "self-employment" income. The software will calculate the self-employment tax for you. You dont necessarily have to file a Schedule C unless you have expenses related to the income.
2007-04-12 01:16:45 · answer #2 · answered by tma 6 · 0⤊ 1⤋
Like I said in my other answer to this question... You totally have to report this as Schedule C income, because the IRS gets copies of all 1099's and they'll be looking for that income to show up on a Schedule C and the associated Self-Employment tax on it.
2007-04-12 00:36:30 · answer #3 · answered by Peggy K 5 · 1⤊ 2⤋
Sorry, but non-employee compensation is not considered "other income". Things like cancellation of debt are considered "other income".
You MUST file a Schedule C...sorry if that's not the news you are wanting.
2007-04-12 01:04:52 · answer #4 · answered by T H 4 · 0⤊ 0⤋
You can't just list it as other income, you have to use schedule C or more likely C-EZ, then use SE also since you haven't yet paid social security tax on the earnings.
2007-04-12 01:57:57 · answer #5 · answered by Judy 7 · 2⤊ 0⤋
You have to do the schedule C, but if you have enough expenses to bring your profit under $400, you don't have to do a schedule SE.
2007-04-12 00:37:16 · answer #6 · answered by Amy F 3 · 1⤊ 2⤋