Generally, Box 7 Nonemployee Compensation is present when an employer pays $600 or more of fees, commissions, prizes, and awards for services performed by a nonemployee, other forms of compensation for services performed for your trade or business by an individual who is not your employee.
Follow the instructions below to correctly enter the Form 1099-MISC w/ box 7 completed:
1. Click Add Form (Ctrl + A).
2. Select FRM 1099-MISC - Miscellaneous Income.
3. Complete the information required on FRM 1099-MISC (check Verify messages).
4. Select the Link to (1040, Sch C or F) field, and choose Choices from the active options window.
5. Select the SCH C# 01 UNNAMED ACTIVITY option from the available options.
6. Navigate to the SCH C [T - UNNAMED ACTIVITY] located on the Attached Forms.
7. Update & Complete the attached SCH C accordingly.
Check out our updated due diligence documents to help you complete the Schedule C.
This type of income generally produces Self-Employment (SE) tax to the taxpayer/spouse. As a tax preparer make sure that the individual whom received this form actually performed some kind of work for their compensation. In most cases, the taxpayer received this form because they worked for someone who did not consider them as an employee, therefore SE Tax is required to be paid by the taxpayer.
For more information on Self-Employment Tax, visit: