Why is there an amount in Box 7 (Nonemployee Comp) on my 1099-MISC?
If your 1099-MISC has income in Box 7 (Non-employee Compensation), the payer is treating it as self-employment income, which means it's subject to the self-employment tax.
You don't necessarily have to own a business to be considered self-employed for tax purposes. You are simply being treated as not an employee.
Examples of typical Box 7 income includes:
- Payment received as a consultant, contractor, freelancer, or other independent worker;
- Executor or trustee fees;
- Fees for serving as company director;
- Value of noncash goods received for services performed;
- Witness or expert witness fees.
That said, sometimes income accidentally gets reported in Box 7 when it really belongs in a different box, for example:
- Employer-provided benefits such as group-term life insurance, mileage and automobile allowances, etc. (these can go in Box 3);
- Golden parachute payments (these belong in Box 13);
- Bonuses or severance pay from your employer (put these in Box 3 instead).