As tax time nears, watch for 1099-MISC forms in the mail; they report income other than wages or salaries to you and the Internal Revenue Service. You'll receive a 1099-MISC for any rents or royalties, prizes or rewards, or payments of $600 or more for work you did for somebody other than a regular employer. You'll receive a separate 1099-MISC from every payer for whom you worked. How you report that information on a Form 1040 federal income tax return depends on the type of income in sections of the 1099-MISC.
Report rents and royalties on a Schedule E Supplemental Income and Loss. Put rents from Box 1 of the 1099-MISC on Line 3 of the Schedule E, royalties from Box 2 on Line 4. Add the totals if you receive more than one 1099-MISC. Complete the rest of the Schedule E as required and enter the total on Line 17 of your Form 1040.
Use a Schedule C for any money you received for freelance work or business activity. Complete a Schedule SE if you are self-employed. Calculate your self-employment tax on that form and use the Schedule C directions to figure your taxable income to enter on Line 12 of your Form 1040. Total the figures from all 1099-MISC forms for Schedule C.
Enter any amounts in Box 3, other income, of the 1099-MISC on Line 21 of Form 1040 and any "excess golden parachute payments" in Box 13 on Line 61. Combine totals if you have more than one 1099-MISC with those boxes completed. Refer to specific IRS instructions if you have a fishing boat or farm income on a 1099-MISC, as special rules apply.
Add amounts in Box 4, income tax withheld, on all 1099-MISC forms. Combine that with any tax withheld from a W-2 or other types of 1099 and record the total in Line 62 of Form 1040. Match that total against your total tax to figure your refund or liability.
- IRS: Instructions for Form 1099-MISC
- Turbo Tax: Information About Form 1099-MISC
- Turbo Tax: Where to Enter Data from Forms 1098 and 1099
- Bankrate.com: Getting and Giving 1099-MISC Income Forms
- IRS: Reporting Rental Income, Expenses, and Losses
- All Law.com: What Do I Do With This 1099 MISC?
- Better Financial Solutions: Who Gets A 1099-Misc?
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