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Since you were not an employee of the company or person who paid you, your payment (compensation) is reported on the 1099-NEC instead of Form W-2.

Per IRS Instructions for Forms 1099-MISC and 1099-NEC Miscellaneous Information and Nonemployee Compensation, on page 10:

Self-employment tax. Generally, amounts paid to individuals that are reportable in box 1 are subject to self-employment tax. If payments to individuals are not subject to this tax, report the payments in box 3 of Form 1099-MISC. However, report section 530 (of the Revenue Act of 1978) worker payments in box 1 of Form 1099-NEC.

To enter the applicable Schedule C information:

  1. From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
  2. Click Business Income, then click Business income or loss from a Sole Proprietorship.
  3. Click +Add Schedule C, and continue with the interview process to enter your information.
  4. On the screen titled Please select which income sources [Taxpayer/Spouse name] received any of these for [Company name] for you in 2023, click the 1099-NEC box, then click Continue.
  5. Enter the information to create a new copy of the form or click  Add to enter an additional new copy of the form or click Edit to edit a form already created (desktop program: click Review instead of Edit).

Please refer to IRS Publication 334 Tax Guide for Small Business for additional information regarding self-employment tax - what it is, who pays it, how it's calculated and reported, etc.

If you determine that this income should not be considered self-employment income (but instead employee income that should have been reported on Form W-2 Wage and Tax Statement), you would need to report the income on Form 1040, Line 1 and file Form 8919 Uncollected Social Security and Medicare Tax on Wages. This allows you to report the uncollected social security and Medicare taxes on your wages.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.

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