A 1099-MISC is used to report different types of income. Based on which box the entry is in and what the income is for, you will report the income differently on your tax return.
Effective tax year 2020 - The 1099-MISC is no longer used to report nonemployee compensation in box 7 on your 2020 tax return. Nonemployee compensation will be reported to the taxpayer using Form 1099-NEC with the nonemployee compensation listed in box 1. All prior years will still use the 1099-MISC for nonemployee compensation.
The two most common entries on Form 1099-MISC are Box 3, Other Income and Box 7, Nonemployee Compensation.
- Box 3 entries are generally just included on line 8 of Schedule 1, of your return as Other Income.
- Box 7 entries require you to generally fill out a Schedule C and treat the income as if you earned it from operating your own business.