Find your earned income in Box 7 under nonemployee compensation. If you were paid royalties, they will be recorded in Box 2 on the form. Box 3 is for any other income you received, which could include bonuses. If you had any federal or state tax withheld, this will be recorded in Box 4 and Box 16, respectively. But unless your employer used this form to report awards and bonuses, most people won't have any information recorded in these places.
Calculate your business net profit or loss during the tax year by adding your business income and subtracting the expenses to operate your business. The IRS requires you use Schedule C or C-EZ with its ending value inserted into the 1040 Form as business income or loss. For example, if the total income on Form 1099-Misc is $15,000 and you have $2,000 in deductible business expenses with no taxes withheld, you must pay federal, state and self-employment tax, consisting of Social Security and Medicare, on the net profit income of $13,000 from the appropriate form. In 2014, for example, the self-employment Social Security rate is 12.40 percent applied to the first $117,000 earned within the year. The Medicare rate -- applied to all income in the year -- is 2.90 percent. For $13,000, the combined 15.30 percent self-employment tax results in $1,989 in SE taxes you would owe.
References Resources More Like This
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