Tax Tips: Help! I got a 1099. What do I do?

You've gotten a form 1099-MISC in the mail, and you're confused because you don't own a business and you don't know what to do with the information on the 1099. You don't actually have to have a "business" in order to receive a legitimate 1099 from another party. If you do work as a subcontractor (not an employee), you will probably get a 1099 for the money you are paid.

You should report the income from the 1099 on Schedule C or Schedule C-EZ. You can also deduct expenses directly related to earning this income. If you have net earnings (income greater than expenses) of $400 or more, you will have to pay self-employment taxes, and should fill out Schedule SE.

Another note: Any income you receive for work should be reported on your taxes. So if you do work as a subcontractor and receive money, but don't get a 1099, you're still required to report that income on your tax return.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.