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IRS.gov Website

Frequently Asked Tax Questions

Interest/Dividends/Other Types of Income - 1099-MISC, Independent Contractors, and Self-employed

  1. I am self-employed. How do I report my income and how do I pay Medicare and Social Security taxes?
  2. I received a Form 1099-MISC instead of a Form W-2. I'm not self-employed, I do not have a business. How do I report this income?
  3. My son is a newspaper carrier. I would like to know if this income is subject to Social Security and Medicare tax and if I must file a Schedule C for him?
  4. 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?
  5. What, if any, quarterly forms must I file to report income as an independent contractor?
  6. My child has joined Americorps and has received an income statement. Are these payments taxable?

Rev. date: 1/1/2011

I am self-employed. How do I report my income and how do I pay Medicare and Social Security taxes?

You are a sole proprietor if you are the sole owner of a business that is not a corporation:
Note: The Federal tax system is based on a pay-as-you-go plan. Tax is generally withheld from employees' wages or salary before they get it. However, tax is generally not withheld from self-employment income. Thus, you may be required to make estimated tax payments. Publication 505, Tax Withholding and Estimated Tax, provides information on making estimated tax payments.

Rev. date: 1/1/2011

I received a Form 1099-MISC instead of a Form W-2. I'm not self-employed, I do not have a business. How do I report this income?

If payment for services you provided is listed in box 7 of Form 1099-MISC (PDF), you are being treated as a self-employed worker, also referred to as an independent contractor:
There are three basic areas that are relevant to determine employment status:
For more information on employer-employee relationships, refer to Chapter 2 of Publication 15, Circular E, Employer's Tax Guide and Chapter 2 of Publication 15-A (PDF), Employer's Supplemental Tax Guide.
If you think that you were, or are, an employee and you would like the IRS to issue a determination, you may submit Form SS-8 (PDF), Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.
Unless you think you were an employee, you report your non-employee compensation on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit from Business:

Rev. date: 1/1/2011

My son is a newspaper carrier. I would like to know if this income is subject to Social Security and Medicare tax and if I must file a Schedule C for him?

Your son may be liable to pay into the Social Security and Medicare system by paying self-employment tax:
Persons engaged in the trade or business of delivering or distributing newspapers or shopping news (including any services directly related to such delivery or distribution), where substantially all of the pay for these services directly relates to sales or other output rather than to the number of hours worked, and the person performs the delivery services under a written contract between the person and the service recipient that states that the person will not be treated as an employee for federal tax purposes,  are considered by statute as nonemployees and are treated as self-employed regardless of age for all Federal tax purposes, including income and employment taxes.

Rev. date: 1/1/2011

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?

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):

Rev. date: 1/1/2011

What, if any, quarterly forms must I file to report income as an independent contractor?

Because you generally will have no taxes withheld from your income, you may need to make quarterly estimated tax payments:
You need to be aware that there may be state and local requirements for estimated tax payments:

Rev. date: 1/1/2011

My child has joined Americorps and has received an income statement. Are these payments taxable?

If you receive an award is listed on a Form 1099-Misc, box-3 other income for $4725.00 with no withholding, than this is reported on line 21 for Other Income on the Form 1040.