To calculate the tax on the amount in a 1099 form, fill out a Schedule C or C-EZ using the amount reported in box 7 for non-employee compensation, according to Intuit. This allows you to calculate the net profit from self-employment, which is the amount in the 1099 minus expenses.Continue Reading
Taxpayers use the 1099 to report income they receive as independent contractors, which means that they were not an employee of the party to which they provided services or skills, as Intuit explains. After filling out Schedule C or C-EZ, report the net profit on your 1040 so that it is taxed in the same manner as other forms of income. Taxes are commonly not withheld from income paid as an independent contractor, so you are responsible for making estimated tax payments on what you receive throughout the year to the Internal Revenue Service. If you have made these payments, report them on the 1040 form to reduce your tax burden.
Income reported from a 1099 form on a tax return may have to be accompanied by a Schedule SE. Use this form to calculate additional taxes on self-employment net profits, such as Social Security and Medicare, as Intuit reports. The employer's portion of these taxes are deducted in the return.Learn more about Taxes