LenaH
Employee Tax Expert

Deductions & credits

If bonuses are reported on a 1099-MISC, then you will still need to pay the uncollected Social Security and Medicare tax, as well as the income tax. This could be why it is populating under your Schedule C and adding self-employment tax (which will end up being your portion of the Social Security and Medicare on this income). 

 

The IRS classifies bonuses as supplemental wages, along with severance pay, taxable fringe benefits, vacation pay, and back pay. 

 

Per the IRS, supplemental wages are subject to Social Security and Medicare taxes. 

 

For more information, please see IRS Publication 15.

 

@margosomar

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