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  • [Music - Piano melody]

  • Hello, I'm Victoria from TurboTax with some important information about your 1099-MISC

  • forms. Did you receive a 1099-MISC in the mail this

  • year? If so, check to see if it reports an amount in box 7 for non-employee compensation.

  • Calculating the tax on the tax isn't as difficult as you may think. There are many reasons why

  • you may receive a 1099-MISC, but commonly it's because of the work you do as an independent

  • contractor, meaning that you aren't an employee of the organizations you provide services

  • to. As an independent contractor, the IRS treats you as self-employed. One advantage

  • to this is that you can take business deductions to reduce your taxable 1099-MISC income. However,

  • this also means that you need to fill out additional schedules with your tax return.

  • Usually, you will have to report the 1099-MISC earnings on a Schedule C or C-EZ to calculate

  • your net profit from self-employment. Your net profit is equal to the amounts reported

  • on your 1099, plus any other business income not on a 1099, minus any business expenses

  • you deduct, such as the cost of purchasing office supplies, for example. Once you calculate

  • this net profit, you report it on your 1040 and it's taxed in the same way as the other

  • types of income you report. Most independent contractors are not subject to tax withholding,

  • so it's important that you make estimated tax payments to the IRS as you earn the income

  • during the year. And if you do, make sure you keep track of each payment so you can

  • report them on your return and reduce the amount of tax you must pay when you file your

  • tax return. When you include income from a 1099-MISC on Schedule C of your tax return,

  • you may also need to file a Schedule SE to report the self-employment taxes you owe on

  • your net profit. These taxes cover the Social Security and Medicare programs. However, you

  • do get to deduct the employer's portion of the self-employment tax you calculate on your

  • 1099-MISC income on the first page of your tax return. If you have 1099-MISC income from

  • contracting or other self-employment, TurboTax Home & Business will guide you step by step

  • through everything you need to report. We'll ask you simple questions about your income,

  • fill in all the right tax forms, and handle the calculations. For more tips and information

  • to help you get your taxes done smarter, visit

  • [Music - Piano melody]

[Music - Piano melody]

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