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Thread: 1099-misc
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Old 02-22-2008, 07:23 PM
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How should a 1099-Misc Income be reported on the tax return?

If there were no related expenses to this income, as you have mentioned in your question, the reporting of this income as Other Income is perfectly correct!

But, I do think that this income should have been subjected to Self-Employment taxes. If a Schedule SE was prepared on the tax return, then there is nothing to worry about a Red Flag, or Amending your Tax return! This return would have been correctly prepared!

But, if your Tax preparer did not treat this Miscellaneous Income being subjected to Self-Employment taxes, then I would request that he or she file an amended tax return and that you should pay the S/E tax on this Misc Income.

It would be a matter of time, before the IRS will send you a notice requesting the payment of S/E Taxes but, they would require you to pay penalties and interest on this tax. By, filing an amended return and paying this S/E tax, you may very well be able to avoid certainly the penalties and possibly the interest as well!

But, there is no problem in terms of a Red Flag or being audited. This is just an inadvertent omission and following my suggestion is the best course of action if no S/E taxes have been paid on this Misc Income!
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