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Tax Trails - Self-Employment Income

Fees and other payments you receive for performing services as a director of a corporation are considered self-employment income. It does not matter whether the fees are for going to directors' meetings or for serving on committees.

You should receive a Form 1099-MISC, Miscellaneous Income, showing the amount you earned as a director. Report income and expenses from your services as a director on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship).

Because you have self-employment income, you will usually owe self-employment tax. Figure your self-employment tax on Schedule SE (Form 1040), Self-Employment Tax.

If you earn or receive income during the year that is not subject to withholding or you do not have enough tax withheld, you may have to pay estimated tax. If you do not pay enough tax during the year through withholding or by making estimated tax payments, you may have to pay a penalty. See Tax Topic 306Penalty for Underpayment of Estimated Tax.

For more information on estimated tax, refer to Chapter 2 of Publication 505, Tax Withholding and Estimated Tax, and Tax Trails - Do You Have to Pay Estimated Tax?


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Page Last Reviewed or Updated: 14-Mar-2016