I have a full time job, regular W2, no issues with that. I did some consulting work and have a 1099-misc for income I made listed in box 7, nonemployee compensation. I'm not too sure how to file it. In my tax software, it gives me a section for 1099-misc. But then it wants me to name my business. It asks me for startup costs. Then it goes on to ask if "I started or acquired this business during 2007." Is all this stuff necessary? What is "accounting method" referring to? They're asking me is I was active in the operation of the business. I'm not sure what they mean. Please help. Thanks!

Hello. You have to report any income reported on the 1099 misc. Because the majority of people that receive these are business owners I am not surprised that your software asks you to state you business. You won't enter a business name if you don't have a business just your name and social security number should work. Most businesses will have a federal ID #. You information will go on the schedule M (Misc Income) If you are filing a 1040.

Yes, when you started your "consulting business" you became self employed and had your own business, something you may not have even thought about, All of the expense of this business can be deducted often.

So when did you start the busineess (? First day you started doing the contracting work) And as a self employed person, you should have been keeping this money separate and paying your costs out of that money.

Were you active, did you work doing it, have a say in day to day operation or did you just have others running it and sat back and just collected a check.

It was consulting work where I had to analyze data online. I didn't really have "daily" operations, like answer phones. It was just part time working, an hour or two an evening, and got paid a lump sum at the end. Does this mean I was "active" in the operation?

Yes, it does.

You have costs associated with this business.
Did you use your computer? Did you upgrade anything (hardware or software) to do the consulting work? If so, that would be a business expense.
Do you pay for internet service? If you used your internet service to perform any part of the tasks, AND you either signed up for internet service OR upgraded to a better package as a result of taking on this consulting work, the service DURING THE TIME OF THE CONSULTING WORK would be a business expense.
THINK about everything you used to perform the task. Electricity, heat, phone, paper and ink cartridges for your printer. Driving back & forth to the company you did the contracting work for.
Tools - if you had to purchase a specific tool(s) to perform the contracting work, that's also tax deductible.

I have a full time job, regular W2, no issues with that. I did some consulting work and have a 1099-misc for income I made listed in box 7, nonemployee compensation. I'm not too sure how to file it. In my tax software, it gives me a section for 1099-misc. But then it wants me to name my business. It asks me for startup costs. Then it goes on to ask if "I started or acquired this business during 2007." Is all this stuff necessary? What is "accounting method" referring to? They're asking me is I was active in the operation of the business. I'm not sure what they mean. Please help. Thanks!!

Name of business -- leave blank or put your own name
Startup cost -- leave blank or 0
I started or acquired... yes
Accounting method -- cash accounting
I was active in the... yes
Your software is asking this question to do schedule C. You can download the schedule C form IRS site and keep in front of you. Then you will have better idea of what is going on.
You need to do schedule C. Then it will also ask your business related expenses.

Read more:
Tax News: Independent Contractor or Self Employed Person getting 1099 (instead of W2) (http://taxgeek.spaces.live.com/blog/cns!2EEA05E22BF141DC!119.entry)

I think I'm getting there, thanks all for the help so far.

Is the job code important, I think it's 5 or 6 digits?

For reimbursing gas, I know you can do the actual costs, and then the estimated based on mileage. I wanted to do the estimated, since I figured that would be easier. But when I read about eligibility to claim the 48 or so cents a mile, it says something like "you must choose to ust it in the first year the car is available for use in your business. Then in later years, you can choose to use either the standard mileage rate or actual expenses." I don't really get that statement.

For job code see the instructions to schedule C.
For travel expenses, you can either deduct actual expenses or at standard mileage rate of 48.5 cents per mile.

About the statement, let us know where you read this statement (publication no, title and page).

For job code see the instructions to schedule C.
For travel expenses, you can either deduct actual expenses or at standard mileage rate of 48.5 cents per mile.

About the statement, let us know where you read this statement (publication no, title and page).

Sorry for no detail on the quote. It's from here...
http://www.irs.gov/pub/irs-pdf/p463.pdf
Page 15, bottom right corner, after the bold statement "Choosing the standard mileage rate"

The statement means that if you are deducting car mileage expenses for the first time, then you must use standard mileage rate.

Yes, it does.

You have costs associated with this business.
Did you use your computer? Did you upgrade anything (hardware or software) to do the consulting work? If so, that would be a business expense.
Do you pay for internet service? If you used your internet service to perform any part of the tasks, AND you either signed up for internet service OR upgraded to a better package as a result of taking on this consulting work, the service DURING THE TIME OF THE CONSULTING WORK would be a business expense.
THINK about everything you used to perform the task. Electricity, heat, phone, paper and ink cartridges for your printer. Driving back & forth to the company you did the contracting work for.
Tools - if you had to purchase a specific tool(s) to perform the contracting work, that's also tax deductible.

To do this consulting work, I needed an internet connection. I already had high speed cable before doing this. Is there some way to deduct this? If so, where?

Also, my tax software is asking is "any of these business taxes apply..." and one of them is "self-employment tax." Should I check this?