If the income is reported in box 7, then as far as the IRS is concerned it's self-employment income. If you report otherwise then be prepared to prove it on a paper audit from the IRS. There are exceptions for box 7 income. But doing something as an "independent contractor" doesn't fall anywhere close to an exception. Doesn't matter if you only did it once. Independent contractors have an intent to make a profit. Period.
If reported in box 3, then usually it's no problem.
Reporting 1099-MISC (box 3 or box 7) that is not self-employment income
Under the Wages & Income tab (or Personal Income tab) scroll down to Other Common Income and elect to start/update Income from form 1099-MISC. Then click YES to indicate you have a 1099-MISC.
Enter the 1099-MISC exactly as printed, and then Continue.
Enter the reason you got this money – be it scholarship, bonus, streaking butt naked across the 50 yard line of the super bowl, whatever. Then continue.
Select None of these apply, then Continue.
Select No, it didn’t involve work….. and Continue.
Select ONLY the tax year for which this specific 1099-MISC was issued. Do not select the year that you received the 1099. Select the year for which the 1099-MISC was issued. Select no other year. Then Continue.
Select No, it didn’t involve an intent to earn money, then Continue.
Select NO, then Continue.
Click the DONE button, and that does it.
