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Wayne Brasch
Wayne Brasch, Accountant and Business Consultant
Category: Tax
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Experience:  Master of Science in Taxation. Tax experience since 1963.
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what does nonemployee compensation mean

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Submitted: 10 years ago.
Category: Tax
Expert:  Wayne Brasch replied 10 years ago.
Nonemployee compensation appears on a Form 1099MISC. By getting that form from someone means that for Federal tax purposes you are self-employed. A self-employed person reports that income on Schedule C to be included with their individual Federal tax return. On that same form, you would enter any expenses you paid in earing that income such as advertising, supplies, mileage, etc. Also, you would need to get a Schedule SE. This form calculates the self-employment tax on the profit from your business. Both the Federal income tax and the self-employment tax will be shown in the appropriate places on Form 1040.