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    romont69's Avatar
    romont69 Posts: 1, Reputation: 1
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    #1

    Jan 27, 2011, 11:05 PM
    What does it mean a 1099 misc in box 7?
    On my 2010 1099 misc from the state of Illinois comptroller-witholding agent, box 7 was check. Do I owed money?
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
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    #2

    Jan 28, 2011, 12:38 AM

    1099-misc (nonemployee compensation) income: You are independent contractor. You must file your tax return if yourself employed income is $400 or more. You will report your income and business related expenses on schedule C or C-EZ (Form 1040). Then you put net income (or loss) on line 12 of Form 1040. This income is subject to SE tax at 13.3% (this is shown on line 57 of Form 1040).
    Even though schedule C treats you as a self employed, which may not be correct for you, this is how you report this income. Your U.S. Tax Return: Tax Filing by Self Employed Sole Proprietor or Independent Contractor
    With 1099-misc you will end up paying about 7.2% more taxes as compared to W-2 employee. The benefit is that with 1099-misc you can deduct your business related expenses on schedule C or C-EZ whereas a W-2 employee you can deduct it only as itemized deduction subject to 2% AGI limit.

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