How to Report Form 1099 Misc

Anyone who is self-employed has likely received a Form 1099-MISC at some point in their career. Even if you are self-employed for a part of the year, you will receive a 1099-MISC from each client who paid you in excess of $600 during the year. Basically, this form is similar to a W-2, except it applies to those who work for themselves. On this form, you'll need to pay close attention to the amounts reported in Box 7, Nonemployee compensation.

Income for self-employed individuals is classified by the IRS as any money received from a company with whom you are not an official employee.

When filing a return, you are required to include amounts from Box 7 of 1099-Misc onto Box 1 of Schedule C, Profit or Loss from Business, with your Form 1040.

Running your own business can get expensive, but luckily there are some costs that can be deducted. Most expenses can be deducted in full, however some require long-term deduction. This type of deduction is called "capitalization", and requires you to deduct a percentage of the expense each year, for a specified number of years.

Any deductions must be deemed necessary, and can't be uncommon. The expense must be typical to your industry, and required to help your business run smoothly and efficiently.

If you have profited from work or your business, you may be subject to a self-employment tax, which includes Medicare and Social Security taxes. To determine the amount of the tax you have to pay, file Schedule SE, Self-Employment Tax, with your regular return.