This is my first year working as a freelance graphic designer for individual clients who are paying me to work on their self-published books. (Normally, I do graphic design for large companies). The amount they are paying me is higher than $600. Even though they aren't a company, can I get a 1099 form from them, or do I report it on Schedule C as income?

Do I pay higher taxes with Schedule C as opposed to a 1099?

Yes, you can request from the individual clients that you need a 1099-Misc for amounts that you have been paid that are over $600. But, the small clients probably will not have a clue what the reporting rules are or how to go about preparing the 1099-Misc's.

You should nevertheless, report the amounts that you were paid on Schedule C and offset any expenses that were related to the production of this income. The Schedule C actually enables you to lower your taxable income from the income earned from the 1099-Misc's as it provides you with an opportunity to deduct relevent expenses related to your Free Lance business.

Thus, it is always preferable to report the 1099-Misc income as a Schedule C income versus reporting on it as Other Income subject to S/E Tax on Schedule 1040 Page 1, Line 21, (as there is no opportunity to deduct any expenses against this income using this approach).

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