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Jean   Murray

Reporting 1099-MISC Income on Your Tax Return

By February 4, 2014

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A reader asked, "Do I need to file my business taxes on Schedule C if I just have a 1099-MISC and no other business income?"

How you report this income depends on whether you consider yourself to be self-employed; that is "in business," with business expenses. Just because you don't have a formal business structure (like a partnership or LLC), it doesn't mean you are self-employed.

If you consider yourself self-employed, report the income on Schedule C - Profit or Loss from Business.

If you don't consider yourself self-employed, how you report this income on your personal tax return depends on where it is located on the 1099-MISC form.

  • If the income is reported in Box 3, Other Income, include the information on this 1099-MISC on Line 21 "Other Income."
  • If your 1099-MISC income has been reported in Box 7, Non-employee income, also report this income on Line 21 of your personal tax return.

The IRS says:

If you are not an employee of the payer, and you are not in a self-employed trade or business, you should report the income on line 21 of Form 1040 and any expenses on Schedule A (Form 1040) (PDF), Itemized Deductions.

William Perez, at Tax Planning, suggests reporting 1099-MISC income on Schedule C. It's a good opportunity to review any possible business expenses that could reduce your tax bill, including a home office space deduction.

More detail from the IRS on how to report 1099-MISC income.

Robert Wood at Forbes reminds us that Form 1099-MISC isn't included with your tax return; keep the form in case you get audited.

Finally, don't forget that if you are self-employed, you must pay self-employment taxes (Social Security and Medicare taxes), based on the profit from your business. More on Self-employment and Self-employment taxes.

Disclaimer: I am not a CPA, enrolled tax preparer, or tax attorney. This information is intended to be general, and is not intended to be tax advice. Each situation is unique; consult a tax professional before making any tax decisions, including filing your business tax return.

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