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Yes or no to Employee question for 1099 employee?

I employed a commercial fishing deckhand to whom I paid a share of the fishing boat proceeds and filed a 1099-misc which is standard practice. When turbotax asks if I paid anyone wages, do I answer "no", since they are not a w-2 employee who is paid "wages". 

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1 Reply
LindaS5247
Expert Alumni

Yes or no to Employee question for 1099 employee?

Yes, as these are not considered wages for tax purposes. You deduction for payments to your deckhand will go on a different line on your Schedule C.  Follow the prompts in TurboTax when completing your Form Schedule C.

 

A 1099 form shows non-employment income, such as income earned by freelancers and independent contractors. 

 

There are several types of 1099s used for different purposes, and Form 1099-MISC is often considered a catchall for income that doesn’t fit into other categories. However, the most common use of Form 1099 is reporting independent contractor payments for services provided to a business.


Prior to tax year 2020 these payments usually appeared on Form 1099-MISC. Now, businesses must separately report nonemployee compensation on Form 1099-NEC. Other than the change for nonemployee compensation, the use of Form 1099-MISC remains mostly the same for payment reporting.

 

Click here for additional information on Form Schedule C.
 

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