Check the IRS instructions for Schedules C and SE to ensure the self-employment status. Some taxpayers are considered self-employed without being aware of this. If you need to calculate Social Security and Medicare taxes, you are most likely considered self-employed.
You must report the income and related expenses as business income on Schedule C or Schedule CEZ. The net income on Schedule C would be included as income on Form 1040. It would also be used to compute the self-employment tax on Schedule SE. The tax calculated on
Sch SE would also transfer to Form 1040.
Important: The IRS instructions for 1099-MISC, page 6, read: "Generally, amounts reportable in box 7 are subject to self-employment tax."
This information applies to all years of the UltimateTax software.
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