I received a Form 1099-MISC with an amount in box 7 for nonemployee compensation. What forms and schedules should I use to report income earned as an independent contractor?
- Independent contractors report their income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). However, you may qualify to use Schedule C-EZ (Form 1040), Net Profit from Business (Sole Proprietorship).
- Also file Schedule SE (Form 1040), Self-Employment Tax if net earnings from self-employment are $400 or more. This form allows you to figure social security and Medicare tax due on your net self-employment income.
- You may need to make estimated tax payments. Refer to Form 1040-ES, Estimated Tax for Individuals for more details on who must pay estimated tax. If you need to make estimated tax payments and don't pay them timely, you may also need to file Form 2210, Underpayment of Estimated Tax by Individuals, Estates & Trusts.