1099-NEC

[NHSGD]

My wife has a couple of unconventional work situations.  She has done freelance writing/editing for a local community center.  She received a 1099 NEC, but after I enter it, TT does not show it under 1099 NEC, but kicks it down to "Schedule C - Business Income."  There is no business, no accounting, expenses, etc. Just a payment for freelance work.  Is it possible to NOT file a schedule C or does a 1099 NEC make default to that?  The other question, should she just have gotten a W2 from them?  

Also, she works as an LNA and provides in-home care through a company.  Same deal, they sent her a 1099 NEC - she doesn't have a private business, she actually works through them.  Should they have sent a W2?

[VolvoGirl]

Sorry, that is self employment income. Self employed, independent contractor,  freelance, etc.  are all the same thing. She needs to pay self employment tax on it since they didn't take taxes out.  To cover Social Security and Medicare.  So she will get Social Security credits for it when she retires.

You are self employed and have to fill out schedule C for business income.  You don't have to have an official business set up.  You and the business are one and the same.  YOU are the business.

She probably should fill out 2 Schedule C for each kind of 1099.

A 1099NEC is for self employment income.  Yes you are the owner of your own self employment business.  You are in business for yourself.  Use your own info.  The people or company that pays you is your customer or client.  You need to fill out schedule C for self employment business income.  You are considered to have your own business for it.  YOU are the business.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.  Here's a Schedule C  https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

You can enter Self Employment Income into Online Deluxe or Premier but if you have any expenses you will have to upgrade to the Self Employed version or use any of the Desktop CD/Download programs.

How to enter self employment income

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

You will need to keep good records.  You may get a 1099NEC at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small and if you don't get the 1099NEC.

You use your own records.  You are considered self employed and have to fill out a schedule C for business income.   You use your own name, address and ssn or business name and EIN if you have one.   You should say you use the Cash Accounting Method and all income is At Risk.   

After it asks if you received any 1099Misc or 1099NEC it will ask if you had any income not reported on a 1099Misc. You should be keeping your own records.  Just go through the interview and answer the questions.   Then you will enter your expenses.

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  

The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 Schedule 2 line 4 which goes to 1040 line 15.  The SE tax is in addition to your regular income tax on the net profit.

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf

[WitchHazel]

My wife is an independent contractor. Her (very few) expenses are fully reimbursed to her and these expenses are NOT included as "income" on her 1099.   I understand that a few years ago IRS decided such persons were still a "business" but there is no info to put on a Sched C; how can I stop Turbotax from producing a Sched C worksheet that endlessly asks me to fill in expenses that do not exist?

[SusanY1]

You can leave the expenses off since she doesn't have them, but the income should still go on the Schedule C since she's an independent contractor.   The type of income, not the expenses, is what generates this form.

Fill out the other applicable information (such as business type, etc.) but skip the part about expenses.

@WitchHazel