Question

1099-NEC

Forum|Forum|5 years ago
February 16, 2021
1 reply
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When I enter my consulting income (say 30K) on my 1099-NEC's under Business Income section it gets transferred to a C and generate SE form and I pay SE tax on it as expected..... However if I enter it under Personal Income section as 1099_NEC, it shows up as other income and does not generate a C or a SE Tax form though it is non-employee compensation (Consulting income). Why is it not linking it to taxable Self employment Income. I do have w-2 income as well - but shouldn't the 1099-NEC's generate a C and SE. Assume no business expenses or deductions etc, I would think it would come out the same...but make a difference of about 3K in taxes due?

TurboTax Home & Biz Windows

KathrynG3

Form 1099-NEC can be reported as other income. But, you are correct, it is more appropriate to associate nonemployee compensation with Schedule C and pay the required SE, self-employment, tax.

It would not come out the same if there were no expenses because when it is categorized as Other Income, it is taxed differently. Sometimes people receive income and it is not from a trade or business or an intent to earn a profit. In those cases, the income should not be subject to the SE tax.

For more information, see:

What is Form 1099-NEC?

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