Part II: Figure Net Profit
Line 1 now is 1a through 1d: Enter the amount as stated for each line.
Part I, line 1a is for amounts from Form 1099-K, Merchant Card and Third Party Network Payments. For 2011, the IRS is delaying the requirement to put the Form 1099-K amounts on this line. The Instructions say enter a zero for 2011 on this line and include the amounts from Forms 1099-K in with other gross receipts on line 1b.
Examples of statutory employees include full-time life insurance salespeople, certain agent or commission drivers, traveling salespeople, and certain homeworkers. The Statutory Employee checkbox in box 13 of the taxpayer's Form W-2 should be checked.
Many taxpayers erroneously report amounts from Form 1099-MISC with wages or other income. This income should instead be reported on Schedule C or C-EZ and on Schedule SE. If the income is reported incorrectly, the IRS may later issue a notice of proposed tax increase for the self-employment income and tax.