I received an 1099-MISC from my employer and the money I made is in box 7. Turbo Tax keeps directing me to pages that show that I am self employed. I am not self employed. How do I need to report my income.

[rjs · Accepted solution]

Did you get also get a W-2 from the same employer? If not, you are self-employed. Whoever gave you the 1099-MISC is treating you as an independent contractor, not as an employee. They are not your employer, they are your client, and you are in business for yourself. You have to report the income as business income, which is what TurboTax is directing you to.

If you did get a W-2 from the same employer, explain what the payment on the 1099-MISC is for, and why it was not included in your W-2, and I will tell you how to enter it.

[kenyayw]

It was because federal withholding was not deducted from my payroll check. It is listed as non employee compensation on the 1099-misc.

[kenyayw]

I did not receive a w-2.

[VolvoGirl]

Sorry, that is self employment income.  If you got wages and you are an employee you would get a W2.

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.  You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

For the future, There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....
http://quickbooks.intuit.com/self-employed

You need to report all your income even if you don't get a 1099Misc. You use your own records.  You are considered self employed and have to fill out a schedule C for business income.   You use your own name, address and ssn or business name and EIN if you have one.   You should say you use the Cash Accounting Method and all income is At Risk.   

After it asks if you received any 1099Misc it will ask if you had any income not reported on a 1099Misc. You should be keeping your own records.  Just go through the interview and answer the questions.   Then you will enter your expenses.

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit 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.  You do get to take off the 50% ER portion of the SE tax as an adjustment on Schedule 1 line 27.  The SE tax is already included in your tax due or reduced your refund.  It is on the Schedule 4 line 57.  The SE tax is in addition to your regular income tax on the net profit.

Here is some IRS reading material……

IRS information on Self Employment
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses
http://www.irs.gov/pub/irs-pdf/p535.pdf

You can enter Self Employment Income into Online Deluxe or Premier but if you have any expenses you will have to upgrade to the Self Employed version.  How to enter self employment income
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