Understanding 1099-NEC forms

What Is a 1099-NEC?

The 1099-NEC (Non-Employee Compensation) is a tax form used to report payments made to independent contractors, freelancers, and other self-employed individuals. If a business paid you $600 or more during the year for services, they're required to send you one.

What Triggers a 1099-NEC?

You'll typically receive a 1099-NEC if:

• You did freelance or contract work for a company
• You provided services as an independent contractor
• A platform (like a gig economy app) paid you $600+
• You received consulting fees or professional service payments

How to Report It in FileJoy

Step 1: Navigate to Income

Click Income in the left sidebar, then select Self-employment.

Step 2: Create or Select a Business

If this is your first 1099-NEC, you'll need to create a Schedule C business first. If you already have one set up, select it.

Step 3: Enter the 1099-NEC

Click Add 1099-NEC and enter the payer's information and the amount from Box 1 (Nonemployee compensation).

Self-Employment Tax Implications

Here's the important part: income reported on a 1099-NEC is subject to self-employment tax (15.3%), which covers Social Security and Medicare. This is in addition to your regular income tax.

FileJoy automatically calculates your self-employment tax and adds it to your return. You'll see it broken out on your tax summary.

The silver lining: you can deduct half of your self-employment tax as an adjustment to income (above the line), which reduces your overall tax bill.

When You Don't Receive a 1099 but Still Owe

This is a common misconception: if you earned less than $600 from a single payer, they're not required to send a 1099. But you're still required to report that income on your tax return.

For example, if you did a $400 freelance project, no 1099 will arrive—but you still add that income to your Schedule C in FileJoy.

Tips

• Match each 1099-NEC to the correct Schedule C business
• If the amount on the 1099 is wrong, contact the payer for a corrected form
• Keep the 1099-NEC forms with your tax records for at least three years
• Don't forget to deduct related business expenses against this income