I was an employee of a company and received many ISO and NQSO options over the years. I quit the company 2 years ago as an employee and became an independent contractor consultant to them. Normally, when you quit a company, you are given a window to exercise your vested options and all remaining un-vested options go away. However, in my case, I specifically had my consultant contract state that my options would continue to vest as long as I was a consultant. I exercised (and sold at the same time) a bunch of the options last year at the same time I was billing the company for my consulting work. I received both a W2 and a 1099-nec for the sale of the stock. Remember that all of my time working for the company last year was as an independent contractor so I was expecting the 1099-nec to show only the income I made billing them my hourly rate as a contractor during that time. So I was surprised to see an extra $350,000 on the 1099-nec, which the company says was for the a portion of the stock sale, while the rest was reported on the W2 (which only has income the from stock sales as I was not an employee). Now I can't figure out what to do in TTax. If I leave the 1099 figures as they are in TTax, then I am paying self-employment taxes on $350,000 that I didn't earn as an independent contractor but rather from the stock sale. Am I correct in that being wrong? Seems to me I should only be charged capital gains on that $350,000 but TTax has being paying capital gains and SE taxes. That can't be right? Any help appreciated. thx. Rick
