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Member I

Self-Employment vs Personal Income Tax

My daughter received income on a 1099-MISC.  The income looks like it was taxed as both personal income and self-employed income. Is this correct?

6 Comments
Member I

Self-Employment vs Personal Income Tax

To add some details..,

1) The amount reported on the 1099-MISC was included on Form 1040 Line 22 - Total Income

2) The amount was used to calculate self-employment tax

3) The Total Tax Due includes both the Total Income and Self-Employment Tax

TurboTax Specialist

Self-Employment vs Personal Income Tax

What box number is on her 1099-MISC and what is the income for? 

Member I

Self-Employment vs Personal Income Tax

Box 7, and the income was for summer contract work in a software testing lab.  It was over $400 as well

TurboTax Specialist

Self-Employment vs Personal Income Tax

Ok. So her employer is treating her as an independent contractor. This is self-employed income and she has to pay the self-employment (social security) taxes on the income in addition to the income tax on the net income. She does get to deduct 1/2 of her self-employment tax so her total taxes should not be anymore than had she been a W-2 employee. She just would have been paying her share of the SS taxes in each paycheck instead of all at one time as self-employed.

 

Enter the 1099-MISC on a schedule C for her 'business'. The net income will flow to line 12 of the 1040. The deductible amount of the self-employment taxes (SE) will flow to line 27 of the 1040 as an adjustment to income.

Member I

Self-Employment vs Personal Income Tax

OK

Paula, thank you for confirming.  That is what I see TT did, but wanted to make sure it was correct.

 

Best regards

Eric

TurboTax Specialist

Self-Employment vs Personal Income Tax

You are welcome Smiley Happy