Questions & Answers

What if my income is not self-employment income?

If you have a 1099-MISC that is not self-employment income subject to self-employment taxes, you need to enter the income in Box 3 of the 1099-MISC instead of Box 7. If your income is not self-employment income, you do not need to use Schedule C to report business income. Instead, the 1099-MISC income will go onto Line 21 of the Form 1040 as Other Income that is only subject to regular tax and not subject to self-employment taxes.

However, you should have the payer reissue another 1099-MISC to you and have the amount put in Box 3 of the 1099-MISC as Other Income instead of Box 7 as Nonemployee Compensation. Otherwise the IRS will expect you to report the Box 7 nonemployee compensation on Schedule C or Schedule F and pay self-employment taxes on it.

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