1099-NEC Tax Loss

Not as closely supervised as employees are independent contractors. They often get project-based work. Independent contracts pay all their own Social Security and Medicare taxes through self-employment tax when they file their income taxes, and they receive 1099-NEC, not a W-2.

Self-employment income is derived as an independent contractor from carrying on a "trade or business." An activity does not necessarily have to be profitable in order to be considered a trade or business, and you do not have to work at it all the time, but profit must be your motive.

Keep in mind, that you will receive a 1099-NEC only if you earn more than $600 from a company. You still have to report that income if you earned less.