When you receive a 1099-NEC, you are considered a contractor and not an employee of the organization who issued the 1099-NEC. When you have income as a contractor, you are considered "self-employed" and you will file a Schedule C Profit and Loss from Business on your tax return.
You are expected to report all your income on the Schedule C, even if it is not reported on a tax form to the IRS - cash and check receipts for your contract work will be part of your self-employed income.
As a self-employed individual, you are allowed (and expected to) report the expenses of your contract work on your tax return. Examples of expenses you can claim:
- Vehicle expenses for work as a delivery driver or Uber or Lyft driver
- Tools you purchase for your work as a handyman, carpenter or other trades person
- Supplies you purchase for your work
It's important to make sure that you claim all legitimate expenses related to your self-employed work as that will help reduce your income subject to income and self-employment tax (which is Social Security and Medicare tax that you will pay on the profit of your self-employment). It's equally important to retain receipts, travel logs, bank statements, etc. that will support the income and deductions from your self-employment work.
To get started on your Schedule C in TurboTax, you can click on the Business tab in TurboTax desktop and click Start on Profit or Loss from Business. In online TurboTax, click on Start for Self-employment income and expenses.
More information is found at Self-employment Taxes in Today's Gig Economy.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
