It depends on how you’re paid and the type of year-end form you receive from the person or business that paid you.
If you’re an employee:
- You received a W-2 from your employer (usually in January or early February).
- Your employer took Social Security and Medicare taxes (FICA) out of your paycheck each payday.
If you’re an independent contractor:
- You received a 1099-MISC with a dollar amount in Box 7 (Nonemployee compensation).
- The payments you received were for the full amount you earned, nothing was deducted for FICA.
If you’re an independent contractor you’re considered self-employed and you’re responsible for reporting your earnings and paying your taxes directly to the IRS.
You should report your net income or losses either on a Schedule C or as other income on Form 1040.
We’ll help you by asking you simple questions about your self employment income and filling out the right tax forms for you.