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Frequently Asked Tax Questions

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

  1. I received a Form 1099-MISC instead of a Form W-2. I'm not self-employed and do not have a business. How do I report this income?
  2. My son is a newspaper carrier. I would like to know if his income is subject to Social Security and Medicare taxes, and if he must file a Schedule C.
  3. I received a Form 1099-MISC with an amount in box 7 for nonemployee compensation. What forms and schedules should I use to report income earned as an independent contractor?
  4. Must I file quarterly forms to report income as an independent contractor?
  5. I received an AmeriCorps Education Award and an income statement for it. Are these payments taxable?

Rev. date: 12/18/2014

I received a Form 1099-MISC instead of a Form W-2. I'm not self-employed and 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), Miscellaneous Income, the payer is treating you as a self-employed worker, also referred to as an independent contractor.
If you were not an employee of the payer, where you report the income depends on whether your activity is a trade or business. You are in a self-employed trade or business if your primary purpose is to make a profit and your activity is regular and continuous.
If you believe you may be an employee of the payer, see Publication 1779 (.pdf), Independent Contractor or Employee, for an explanation of the difference between an independent contractor and an employee. For more information on employer-employee relationships, refer to Chapter 2 of Publication 15, (Circular E), Employer's Tax Guide, Chapter 2 of Publication 15-A, Employer's Supplemental Tax Guide, and Tax Topic 762, Independent Contractor vs. Employee.

Rev. date: 12/18/2014

My son is a newspaper carrier. I would like to know if his income is subject to Social Security and Medicare taxes, and if he must file a Schedule C.

As a newspaper carrier, your son may be a direct seller liable to pay self-employment tax. A direct seller is someone who satisfies the following conditions:
Self-employed persons, including direct sellers, report their income on Schedule C (Form 1040) (.pdf), Profit or Loss from Business (Sole Proprietorship), or Schedule C-EZ (Form 1040) (.pdf), Net Profit from Business. Use Schedule SE (Form 1040) (.pdf), Self-Employment Tax, if the net earnings from self-employment are $400 or more.
If your son is not a direct seller (i.e., he does not satisfy the conditions above), he may still be liable to pay self-employment tax if he is engaged in a trade or business.
If your son is not a direct seller and is not engaged in a trade or business, he may be an employee whose wages are subject to income tax withholding, and Social Security and Medicare taxes.  
If your son is an employee and is under 18 years of age, his income generally is not subject to Social Security and Medicare taxes. If his income exceeds a threshold amount, he must report it as wages on Form 1040 (.pdf), Form 1040A (.pdf), U.S. Individual Income Tax Return, or Form 1040EZ (.pdf), Income tax Return for Single and Joint Filers with no Dependents.
For more information on the rules that apply to direct sellers and newspaper carriers and distributors, see Publication 334, Tax Guide for Small Business. For an explanation of the difference between an independent contractor and an employee, see Publication 1779, Independent Contractor or Employee, and Tax Topic 762, Independent Contractor vs. Employee.

Rev. date: 12/18/2014

I received a Form 1099-MISC with an amount in box 7 for nonemployee compensation. What forms and schedules should I use to report income earned as an independent contractor?


Rev. date: 12/18/2014

Must I file quarterly forms to report income as an independent contractor?

You may need to make quarterly estimated tax payments. For information on estimated tax payments, refer to Form 1040-ES (.pdf), Estimated Tax for Individuals.
Note: You may also have state and local requirements for estimated tax payments. See your state's individual website for additional information. To access information for your state, refer to our State Government Websites page.

Rev. date: 03/18/2015

I received an AmeriCorps Education Award and an income statement for it. Are these payments taxable?

Yes, AmeriCorps Education Awards are taxable in the year they are paid. If you receive an award and the payment was $600 or more during the year, you should receive a Form 1099-MISC (.pdf), Miscellaneous Income. The 1099-MISC will show the amount of the award in box 3, Other Income, with no withholding. Report the payment amount on the "Other income" line of Form 1040 (.pdf), U.S. Individual Income Tax Return, even if you do not receive Form 1099-MISC.
Visit AmeriCorps for more information on the Segal AmeriCorps Education Award programs.