If you are self-employed or a contract employee you will have likely received a Form 1099-MISC at some point. Even if you are not self-employed for the whole year you will still receive a 1099-MISC for any client or company who paid you more than $600. In simple terms this form is like a W-2 for persons who are self-employed. Box 7 of Form 1099-MISC, Nonemployee Compensation will show you any funds you are paid by clients or employers, you may also receive multiple 1099-MISC if you worked for more than one client throughout the year.
The 1099-MISC may also give you more information of which you may be required to report. You can use the information below to help figure out what information you need the most when preparing your return.
- Box 1: Rents – This box will include the amount of any income paid to you for rent by another party that is more than $600. This can include rental income from office space, machinery and equipment or farmland.
- Box 2: Royalties – Any income greater than $10 earned via licensing fees from patents, trademarks or copyrights will have to be reported.
- Box 7: Nonemployee Compensation – This is the taxable income earned from self-employment or contract work. Any persons you rendered services of more than $600 will be reported in this box. An example of this can be if you provide freelance work such as writing and earned more than $600 will be reported in Box 7 of Form 1099-MISC.