1099 MISC & Schedule C


H

Harinath

I have a W2 income, additionally, I received $1000 from a
different company for a one time consultancy, subsequently i
received 1099-MISC declaring this income as non employee
compensation.

This was a one time non business activity, and i don't own
any business.

I am not sure how should i go about reporting this income.

Questions:

1. Do i need to use Schedule C. If yes, how do i approach
Line A through Line F,
2. Should i be making up my own company name
3. Can i use my home address
4. Can i leave the EIN blank, and should i be applying for
one.
5. Do i need to register a business before filing 1099 MISC
as small business income. (even though i don't own a
business)
6. What documentation i my required to maintain.

I don't anticipate freelance incomes in future, please
advise on how to handle this situation and also, if there
are any other options besides filing Schedule C.

Appreciate your guidance.

Thanks
Hari
 
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H

Herb Smith

Harinath said:
I have a W2 income, additionally, I received $1000 from a
different company for a one time consultancy, subsequently i
received 1099-MISC declaring this income as non employee
compensation.

This was a one time non business activity, and i don't own
any business.
Au Contraire! You received money for consulting, therefore
you acted as an INDEPENDENT contractor. Sounds like a
business to me (I use the "duck" test).
I am not sure how should i go about reporting this income.
Schedule C or C-EZ
Questions:

1. Do i need to use Schedule C. If yes, how do i approach
Line A through Line F,
C or C-EZ is appropriate. Use the EZ form if your expenses
are less than $5,000. Follow the instructions.
2. Should i be making up my own company name
Not necessary
3. Can i use my home address
Yes

4. Can i leave the EIN blank, and should i be applying for
one.
A sole proprietor business, with no employees, can use the
SSN of the owner. An EIN is not necessary.
5. Do i need to register a business before filing 1099 MISC
as small business income. (even though i don't own a
business)
That is a state-specific issue and has nothing to do with
filing your federal taxes. Your "business" is consulting,
the net income is taxable, and (if high enough) will require
the payment of employment taxes (Schedule SE).
6. What documentation i my required to maintain.
Your tax return and TP copy of the 1099MISC form, for a
minimum of 3 years after filing.
I don't anticipate freelance incomes in future, please
advise on how to handle this situation and also, if there
are any other options besides filing Schedule C.
No, filing Schedule C and SE is pretty much it.
 
Last edited by a moderator:
B

Bill

(e-mail address removed) (Harinath) posted:
I have a W2 income, additionally, I received
$1000 from a different company for a one time
consultancy, subsequently i received
1099-MISC declaring this income as non
employee compensation.
This was a one time non business activity, and
i don't own any business.
I am not sure how should i go about reporting
this income.

Questions:
1. Do i need to use Schedule C. If yes, how do
i approach =A0 Line A through Line F,
On line A, you can simply enter "Consulting." For line F,
you are considered a "cash" accrual business. Ignore
business name and address (since it is your home), as well
as EIN number. Default will be your own SSN, which should
appear at the top of the form.
2. Should i be making up my own company
name
3. Can i use my home address
4. Can i leave the EIN blank, and should i be
applying for =A0 one.
Answered above.
5. Do i need to register a business before filing
1099 MISC =A0 as small business income. (even
though i don't own a =A0 business)
No.

6. What documentation i my required to
maintain.
Nothing, other than your own return as filed, including the
Schedule C or C-EZ (recommended in your case), and any
record of expenses claimed.
I don't anticipate freelance incomes in future,
please advise on how to handle this situation
and also, if there are any other options
besides filing Schedule C.
The C-EZ is ideal for your situation. You have limited
income, no expenses have been cited (though if you had some,
you can deduct them on the C-EZ -- but not enough to cause a
loss). You'll need instructions for the Schedule C-EZ,
available either online for download @ www.irs.gov, or you
can get them from most libraries. [One note: A seeming
hurdle is the "principal business code" -- but the catch-all
six-digit code is 999999 (unclassified).]

Bill
 
Last edited by a moderator:
B

Benjamin Yazersky CPA

Harinath said:
I have a W2 income, additionally, I received $1000 from a
different company for a one time consultancy, subsequently i
received 1099-MISC declaring this income as non employee
compensation.

This was a one time non business activity, and i don't own
any business.

I am not sure how should i go about reporting this income.

Questions:

1. Do i need to use Schedule C. If yes, how do i approach
Line A through Line F,
2. Should i be making up my own company name
3. Can i use my home address
4. Can i leave the EIN blank, and should i be applying for
one.
5. Do i need to register a business before filing 1099 MISC
as small business income. (even though i don't own a
business)
6. What documentation i my required to maintain.

I don't anticipate freelance incomes in future, please
advise on how to handle this situation and also, if there
are any other options besides filing Schedule C.
You really need to find your own CPA/tax advisor to
determine how these items affect you.

The foregoing is intended for educational purposes only and
does NOT constitute legal OR professional advice
 
Last edited by a moderator:
M

Missy

Harinath said:
I have a W2 income, additionally, I received $1000 from a
different company for a one time consultancy, subsequently i
received 1099-MISC declaring this income as non employee
compensation.

This was a one time non business activity, and i don't own
any business.

I am not sure how should i go about reporting this income.

Questions:

1. Do i need to use Schedule C. If yes, how do i approach
Line A through Line F,
2. Should i be making up my own company name
3. Can i use my home address
4. Can i leave the EIN blank, and should i be applying for
one.
5. Do i need to register a business before filing 1099 MISC
as small business income. (even though i don't own a
business)
6. What documentation i my required to maintain.

I don't anticipate freelance incomes in future, please
advise on how to handle this situation and also, if there
are any other options besides filing Schedule C.
You may use Schedule C-EZ and probably not have to enter any
of the above except the $1000 income. This flows to page 1
of the 1040 on line 12. The $1000 also goes on Schedule SE
so you can pay the $141 in Self Employment tax Which goes on
page 2 of the 1040, Line 58. You do not need to put down a
name of a business or apply for an EIN. They just want the
income reported.

Missy Doyle
 
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C

cpabakem01

Harinath said:
I have a W2 income, additionally, I received $1000 from a
different company for a one time consultancy, subsequently i
received 1099-MISC declaring this income as non employee
compensation.

This was a one time non business activity, and i don't own
any business.

I am not sure how should i go about reporting this income.

Questions:

1. Do i need to use Schedule C. If yes, how do i approach
Line A through Line F,
2. Should i be making up my own company name
3. Can i use my home address
4. Can i leave the EIN blank, and should i be applying for
one.
5. Do i need to register a business before filing 1099 MISC
as small business income. (even though i don't own a
business)
6. What documentation i my required to maintain.

I don't anticipate freelance incomes in future, please
advise on how to handle this situation and also, if there
are any other options besides filing Schedule C.
It's SE Income to be reported. File Sch C under your NAME,
ADDRESS & SOCIAL SECURITY NUMBER - No registration
 
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E

eagent

Harinath said:
I have a W2 income, additionally, I received $1000 from a
different company for a one time consultancy, subsequently i
received 1099-MISC declaring this income as non employee
compensation.

This was a one time non business activity, and i don't own
any business.

I am not sure how should i go about reporting this income.

Questions:

1. Do i need to use Schedule C. If yes, how do i approach
Line A through Line F,
2. Should i be making up my own company name
3. Can i use my home address
4. Can i leave the EIN blank, and should i be applying for
one.
5. Do i need to register a business before filing 1099 MISC
as small business income. (even though i don't own a
business)
6. What documentation i my required to maintain.

I don't anticipate freelance incomes in future, please
advise on how to handle this situation and also, if there
are any other options besides filing Schedule C.

Appreciate your guidance.
You DO own a business - you acted as a unincorporated
consultant when you contracted to do the work you got paid
$1,000 for.

I would suggest that if the instructions for Schedule C are
unclear to you that you would be well served by using a
professional preparer for this return. This will accomplish
several things:

1 - you should have more confidence that your return will be
correct;
2 - you will know what to do in the future;
3 - if you are having trouble with the disclosure portion of
Schedule C it is very likely that you may miss something
else that could adversely impact your situation.

Good luck,
Gene E. Utterback, EA, RFC
 
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