@RobertG wrote:
Your employer should have reported it on your W-2.
Since they did not, you have to report it as self-employment income.
Because it is compensation for services, it is subject to self-employment, (Social Security) tax.
Just answer the questions as if you were self-employed in your W-2 occupation and worked out of your home.
I disagree. I believe that when you enter the 1099, there is a list of special circumstances and one of them is "my employer should have reported this money on my W-2." That will prepare a substitute W-2 form and you will pay 7.65% social security and medicare tax instead of 15% self-employment tax.
Your employer is required to report anything of value that you receive as compensation for your work on your W-2, including prizes, awards and incentives. (Unless the item falls into a category of allowable tax-free fringe benefits. Awards are not eligible for tax-free fringe benefits unless they are small and meet certain defined rules, in which case you should not get a 1099 either.)
