1099-NEC 2020 vs 2021

Forum|Forum|4 years ago
February 14, 2022
1 reply
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My wife works as a freelance transcriber (1099). For the past few years her 1099 came in as a 1099-NEC. It's the same this year but we are now being asked to fill out a Schedule C and pay business taxes for both Federal and Ohio. How come?

Thanking you in advance,

David

ThomasM125

Level 15

The type of income you describe is treated as self-employment income by the IRS and as such is subject to self-employment tax, which is used to fund your social security retirement. Just as salary employees need to pay into social security, so do self-employed workers. You need to complete schedule C to earmark the income as self-employment income and so the self-employment tax can be entered on your tax return.

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