1099-MISC, Independent Contractors, and Self-employed
This is archived information that pertains only to the 2002 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
I work as an independent contractor, but I do not own a business and do not perform services in the name of a business. Can I file my tax return without filing Schedule C or Schedule SE?
The income you earn as an independent contractor generally will be considered income from self-employment and you will need to file Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or you may qualify to use Form 1040, Schedule C-EZ (PDF), Net Profit from Business. You will also need to file Form 1040, Schedule SE (PDF), Self-Employment Tax, if you had net earnings from self-employment of $400 or more.
References: I made several thousand dollars moonlighting as an independent contractor. What taxes do I need to pay?
You are responsible for Federal income tax and self-employment taxes on your income as an independent contractor. Self-employment taxes are your contributions to Social Security and Medicare. Your self-employment income and expenses will be reported on Form 1040, Schedule C (PDF), Profit or Loss from Business, or you may qualify to use Form 1040, Schedule C-EZ (PDF), Net Profit from Business. You will also need to use Form 1040, Schedule SE (PDF), Self-Employment Tax, to compute and report your social security and Medicare tax, if you had net earnings from self-employment of $400 or more. Since there is no withholding on your self-employment income, you may need to make quarterly estimated tax payments. This is done using a Form 1040ES (PDF), Estimated Tax for Individuals.
References: - Form 1040, Schedule C (PDF), Profit or Loss from Business
- Form 1040, Schedule C-EZ (PDF), Net Profit from Business
- Instructions for Form 1040, Schedule C
- Publication 334 (PDF), Tax Guide for Small Business
- Form 1040, Schedule SE (PDF), Self-Employment Tax
- Form 1040ES (PDF), Estimated Tax for Individuals
- Tax Topic 355, Estimated Tax
- Tax Information for Business
- Publication 505 (PDF),Tax Withholding and Estimated Tax
9.3 Estimated Tax: Individuals Do self-employment taxes need to be paid quarterly or yearly?
Self-employment tax is paid by making quarterly estimated tax payments which include both income tax and social security tax.
References: 12.2 Small Business/Self-Employed/Other Business: Form 1099-MISC & Independent Contractors What forms and schedules should be used to report income earned as an independent contractor?
Independent contractor report their income on Form 1040, Schedule C (PDF), Profit or Loss from Business, or they may qualify to use Form 1040, Schedule C-EZ (PDF), Net Profit from Business. Independent contractors should also be aware of Form 1040, Schedule SE (PDF), Self-Employment Tax. This form is used to figure social security and Medicare tax which is based on self-employment income. Also, see Form 1040ES (PDF) Estimated Tax For Individuals, as you may need to make quarterly estimated tax payments.
References: - Form 1040, Schedule C (PDF), Profit or Loss from Business
- Form 1040, Schedule C-EZ (PDF), Net Profit from Business
- Instructions for Form 1040, Schedule C
- Form 1040, Schedule SE (PDF), Self-Employment Tax
- Form 1040ES (PDF), Estimated Tax for Individuals
- Instructions for Form 1040, Schedule SE
- Publication 533 (PDF), Self-Employment Tax
- Publication 334 (PDF), Tax Guide for Small Business
- Tax Topic 554, Self-Employment Tax
- Publication 505 (PDF), Tax Withholding and Estimated Tax
- Tax Information for Business
12.8 Small Business/Self-Employed/Other Business: Schedule C & Schedule SE I am self-employed. How do I report my income and how do I pay Medicare and social security taxes?
Your self-employment income is reported on Form 1040, Schedule C (PDF), Profit or Loss from Business, or on Form 1040, Schedule C-EZ (PDF), Net Profit from Business.
Your Medicare and social security taxes are reported on Form 1040, Schedule SE (PDF), Self-Employment Tax.
As a self-employed person, you pay your Medicare and social security taxes the same way you pay your income taxes. If you expect to owe less than $1,000 in total taxes, you can pay them when you file your income tax return. If you expect to owe $1,000 or more in total taxes, you will need to make estimated tax payments. These payments are made quarterly using Form 1040ES (PDF), Estimated Tax for Individuals. You will need to figure these taxes at the beginning of the year. To learn about figuring and making estimated tax payments, please refer to Publication 505 (PDF), Tax Withholding and Estimated Tax.
References: 12.9 Small Business/Self-Employed/Other Business: Starting or Ending a Business If you start your own business and send in your quarterly estimated income taxes, must you also file a personal income tax return at the end of the year?
If you have $400 or more of net profit from your business, you will have to file a Form 1040 with a Form 1040, Schedule C (PDF), Profit and Loss from Business (Sole Proprietorship) and a Form 1040, Schedule SE (PDF), Self-employment Tax.
References: I just started a small business and want to know if I have to file my income taxes quarterly or at the end of the year?
For income taxes you will likely file annually, but you may have to pay quarterly. As a self-employed individual, you must determine if you are liable for making estimated taxes which are paid on a quarterly basis. The estimated tax worksheet is Form 1040ES (PDF), Estimated Tax for Individuals. When you file your income tax return, you include the income from the business on that return. The forms to be filed are the Form 1040 (PDF), U.S. Individual Income Tax Return, Form 1040, Schedule C (PDF), Profit or Loss from Business, and Form 1040, Schedule SE (PDF), Self-employment Tax. You may qualify to use Form 1040, Schedule C-EZ (PDF), Net Profit from Business.
References:
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