My wife received a 1099 Misc form for a business that she tutored with, but is not a proprietor, why do we have to file a schedule C? We do not own the business.

[BMcCalpin]

In the eyes of the IRS, your wife owns a business of providing contract tutoring services to the company. If she wasn't an employee (W-2), then she was a contractor who is the proprietor of a business and who has to report her income and expenses on Schedule C.

The IRS does this so that

1. You can deduct all appropriate expenses with the business (the ability of employees to delete business expenses is limited), and

2. You file a Schedule SE along with the Schedule C (TurboTax will do this automatically) so that the right amount of Social Security and Medicare taxes will be computed and sent to the government.

This is generally true of all earned income: either you are an employee whose employer handles the Social Security and Medicare taxes, or you are a contractor who has to do it yourself through Schedules C and SE.