Lots of questions asking what to do when you get Form 1099-MISC… and you don’t own your own business but instead you’re an employee of another company. Yet you get this form; what do you do with it?
The short answer is: if your Form 1099-MISC shows an amount in Box 7 for nonemployee compensation and it’s because you did consulting work or other services for someone, you DO now "have a business!" You’re in the business of consulting, and you have to file Schedule C to report that 1099-MISC income. This is a requirement, not an option!
The good thing about filing Schedule C is the ability to apply any expenses you incurred while performing those services. Think about what you did: did you drive places during the course of the work you did? Take a mileage deduction. Did you buy computer or office supplies to use during the consulting? Take an office supplies deduction.
The only downside is that you’ll be subject to self-employment tax on your consulting earnings… which is basically the self-employed person’s equivalent of social security and Medicare tax that employers normally withhold from your paychecks. That tax is calculated on Schedule SE, and you’ll see an amount appear on Form 1040, line 58.