1099-NEC

[jrvandew1959]

In 2020 and 2021 I performed contracting work for a company and received a 1099-NEC each year.  When I did my taxes a year ago for 2020 Turbo Tax correctly treated it as Other Income in schedule 1.  When I put the 1099-NEC info in for 2021 Turbo Tax is treating me like an owner and putting the amount on line 3 (Business income and loss) and putting the amounts onto Schedule C which is not apllicable to me since I am not an owner.

Any suggestions how to correct the 2021 tax information in Turbo Tax.?  Thanks

[VolvoGirl]

Sorry you did 2020 wrong.  It goes on Schedule C.  That is self employment income.

Yes you are the owner of your own self employment business.  You are in business for yourself.  Use your own info.  The people or company that pays you is your customer or client.  You are considered to have your own business for it.  YOU are the business.

You need to fill out schedule C for self employment business income and pay self employment tax in addition to regular income tax on it.  The SE tax is to pay Social Security and Medicare tax that wasn't taken out like on a W2.

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 income from Self Employment

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

[FangxiaL]

You don't have to be an owner to file Schedule C and pay self-employment tax. If the company that you work with doesn't want to treat you as an employee (many with the goal of saving employment tax and employee benefits), it issues you a 1099-NEC, which is non-employee compensation. The IRS wants someone to pay the Social Security tax and Medicare tax. 

You should have filed Schedule C on your 2020 return. You need to file Schedule C on your 2021 return to avoid receiving any notice from the IRS.  

[VolvoGirl]

So you should amend 2020 and pay the self employment tax on it since they didn't take out Social Security and Medicare for you.  And you can deduct any expenses you had.

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 (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.