Basically, it depends on what box the income is reported in on the 1099-MISC. In your situation I would fully expect the income to be reported in box 7 of the 1099-MISC. That being the case, as far as the IRS is concerned that money was earned while self-employed and "in business" for one's self. So it gets reported on SCH C as a part of your 1040 personal tax return. It doesn't matter if you file joint (with I highly recommend) either.
So since your wife is basically self-employed, she needs to keep extremely detailed records of her business income and business expenses. These records will be needed to correctly/accurately report the business income and business expenses. For any and all expenses, receipts should be kept too, so proof can be produced if audited. Basically, when dealing with the IRS there are three rules to keep in mind at all times.
1) You are guilty until proven innocent.
2) The burden of proof is on the accused (that would be you!) and not the accuser.
3) If it's not in writing, then it flat out did not occur. Scream and holler on you want it won't matter. Show the charge on your credit card statement and that won't matter. If you can't prove it was a "business" expense, you lose. Period.
Now, since 2019 will be the first year dealing with business income and a SCH C, I highly recommend that you not use the online version of TurboTax. For a first time user of the program, and for an experienced user dealing with a form they've never dealt with before, I consider the online version to be extremely user un-friendly. You'll find the CD version that you install on your computer is more intuitive and easier to navigate. Additionally, the CD version has what's called "forms mode" where you can switch to that mode and "follow the money" when trying to understand the tax implications of something, or trying to find a problem where the user went astray unknowing and entered incorrect data or made a wrong selection. This "forms mode" is just flat out not possible with the online version.
Another thing to keep in mind is quarterly taxes that need to be paid on self-employment income. Now the IRS has all these forms you can use to "figure" your quarterly tax payments. But in my personal option (and that's all this is, a "personal" opinion) it's a complete waste of your time and effort. In a nutshell, if you just send the IRS 20% of your gross business income each quarter, then come tax filing time you'll be fine. I've been self-employed for about 15 years now, and just send the IRS 20% of my gross business income each quarter. Then at tax filing time I am never more than $1000 away from my total tax liability for the year. Some years I get a refund and it's always less than a $1000 dollars. Some years I owe the IRS, and again, it's always less than $1000. In fact, in the 2-3 years I've owed the IRS, my biggest tax bill I had to pay at tax filing time was around $475. I just wrote the check and was done for the year.
Now one would think quarterly taxes would be paid on even quarters. But the IRS doesn't do things that simple. Here's the due dates for 2019 quarterly taxes.
1st payment: April 15, 20192nd payment: June 17, 20193rd payment: September 16, 20194th payment: January 15, 2020Now if your state taxes personal income, you'll need to pay quarterly taxes to your state too. So you'll need to check the state website for their due dates, and see what the tax rate is for your state to determine what percentage of your business income to send the state each quarter.Now when it comes to your federal quarterly taxes there are several ways you can pay. You can get a set of blank 1040-ES forms for 2019 at https://www.irs.gov/pub/irs-pdf/f1040es.pdf and send one each quarter with your payment to the IRS address as indicated in the instructions (included on that page) based on your physical location.You can also pay your quarterly taxes online using a credit card or via an ACH withdrawal from your bank account at http://www.irs.gov/payments. This is the method I use and I just print out my receipt when done and file it with my business stuff. I will need it at tax filing time so I can make sure I get credit for taxes already paid. That's enough for now as we're approaching what I refer to as "information overload" and I don't want to risk adding to the confusion.
