1099

[joshbierman]

I also have a 1099-NEC that I entered $600 and it took $347 off of my return. That is about 58% tax on my $600 income. Looks like robbery.

[VolvoGirl]

A 1099NEC is for self employment income on Schedule C.   Do you have any expenses you can deduct?  It will increase your total income so you owe more tax.   

You will pay Self Employment tax (Scheduled SE) on a Net Profit of $400 or more on Schedule C in addition to regular income tax on it.   You pay 15.3% SE tax on 92.35% of your Net Profit (If it is greater than $400).  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  

[joshbierman]

Do you see the problem though? 15.3% is a lot different than 58%.

[rjs]

@joshbierman 

Adding income to a tax return can have side effects besides the direct tax on the added income. The increase in income could reduce or eliminate various deductions or credits that are not related to the income that was added, but that have income-based limits or phase-outs. If you received Social Security benefits it could make more of your Social Security taxable. These side effects are in addition to the self-employment tax.

To figure out why it's reducing your refund so much you have to compare your entire Form 1040 line by line before and after adding the 1099-NEC to see what else is changing besides the 1099-NEC income. If there's a change in an amount that comes from another form or schedule, you have to look at that form or schedule to see what's happening.