Self-Employment vs Personal Income Tax

[esolliday]

My daughter received income on a 1099-MISC.  The income looks like it was taxed as both personal income and self-employed income. Is this correct?

[esolliday]

To add some details..,

1) The amount reported on the 1099-MISC was included on Form 1040 Line 22 - Total Income

2) The amount was used to calculate self-employment tax

3) The Total Tax Due includes both the Total Income and Self-Employment Tax

[PaulaM]

What box number is on her 1099-MISC and what is the income for? 

[esolliday]

Box 7, and the income was for summer contract work in a software testing lab.  It was over $400 as well

[PaulaM · Accepted solution]

Ok. So her employer is treating her as an independent contractor. This is self-employed income and she has to pay the self-employment (social security) taxes on the income in addition to the income tax on the net income. She does get to deduct 1/2 of her self-employment tax so her total taxes should not be anymore than had she been a W-2 employee. She just would have been paying her share of the SS taxes in each paycheck instead of all at one time as self-employed.

Enter the 1099-MISC on a schedule C for her 'business'. The net income will flow to line 12 of the 1040. The deductible amount of the self-employment taxes (SE) will flow to line 27 of the 1040 as an adjustment to income.

[esolliday]

OK

Paula, thank you for confirming.  That is what I see TT did, but wanted to make sure it was correct.

Best regards

Eric

[PaulaM]

You are welcome 🙂