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I recently was hired on at a company that had me initially contracted for two months as a consultant for my trial period. I received the 1099 Misc in the mail only to discover the income was listed in Box 7 triggering a Schedule C which then charges me a business tax. The thing is, I don't have my own business. What should I do to report the income without incurring the extra taxes? In the past, I've used box 3 so I still pay federal and state income tax but I've never seen the Schedule C business tax due to my work being very brief stints of consulting. Is there a work around for this? Thanks! |
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There's no workaround for this. This is how my social security gets paid for. Thank you. [What you were paid for your work almost certainly should have been on a W-2 and subject to withholding but your "employer" was too cheap to pay half of your social security taxes and made you pay for it.] |
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That's called being an independent contractor and it is reportable on a Schedule C. Yes - you DO basically own a business when you perform independent contractor work! Box 3 is wrong. I assure you. Read the directions in PUB 17 for starters. I am a CPA. |
