What's the difference between self-employment income and other income?
There are some major differences between them.
- Money you earn as a contractor, consultant, freelancer, or other independent worker.
- It's reported on 1099-MISC (Box 7), 1099-K (Box 1a), or as cash, check or credit card sales transactions.
- Requires you to complete Schedule C.
- You can deduct expense related to the income.
- Requires you to pay self-employment tax.
- It's money you received from something like a prize, award, lawsuit settlement, etc.
- It's most often on a 1099-MISC (Box 3).
- You report it on Line 21 of Form 1040.