1099-Misc

Question: I recently worked for a company as a sub-contractor and received a 1099-Misc. What does this form mean?

Answer: Form 1099-Misc is similar to a W-2 that employees receive every year from their employer. The company that you worked for did not withhold taxes from your pay in this case; therefore you are required to pay self-employment taxes.

A copy of the 1099-Misc is also sent to the IRS and goes to your file. You must report this income on a Schedule C when you file your return in April.

You will get a chance to deduct the expenses that you incurred in doing this work as a sub-contractor. Make sure, however, that you keep good records including a mileage log if deducting mileage.