The back of Form 1099-MISC instructs to carry payments in box 6 to Schedule C. Does this mean that Self-Employment Tax applies to these payments? I am having a hard time finding a reference for this. Thanks for any help!
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The IRS instructions for filling out Form 1099-MISC says the following:
So assuming the 1099-MISC issued to your client is correct, your client is in the business of providing medical services and thus, the income reported in box 6 is includable in the gross income of your client (Schedule C if your client is self-employed, subject to self-employment tax).Box 6. Medical and Health Care Payments
Enter payments of $600 or more made in the course of your
trade or business to each physician or other supplier or
provider of medical or health care services. Include
payments made by medical and health care insurers under
health, accident, and sickness insurance programs. If
payment is made to a corporation, list the corporation as the
recipient rather than the individual providing the services.
Payments to persons providing health care services often
include charges for injections, drugs, dentures, and similar
items. In these cases the entire payment is subject to
information reporting. You are not required to report
payments to pharmacies for prescription drugs.
The exemption from issuing Form 1099-MISC to a
corporation does not apply to payments for medical or health
care services provided by corporations, including
professional corporations. However, you are not required to
report payments made to a tax-exempt hospital or extended
care facility or to a hospital or extended care facility owned
and operated by the United States (or its possessions), a
state, the District of Columbia, or any of their political
subdivisions, agencies, or instrumentalities.
If your client is not in the business of providing medical services, then the person who issued the 1099-MISC did it wrong.Last edited by Bees Knees; 01-31-2014, 12:30 PM.
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