I would say that the income reported in both of these boxes represents compensation for services you provided, and should be reported the same way on your tax return. If you have professional expenses that you want to deduct against this income, you should report both amounts as gross revenues on your Schedule C.



If they reported your income in Box 3, Other Income, then I would say that they prepared the form incorrectly. When income is reported in Box 3, it generally isn't subject to social security or self-employment taxes. Taxable grants and other awards are usually reported in this box.

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Replying to:

I moonlight for a state agency (Michigan) and they sent me 1099-misc with my income in box 6 (medical and heatlh care payments) as opposed to box 7 (nonemployee compensation). Interchange of these 2 boxes make a big difference in tax I pay. My question is did they account for it incorrectly and should have my income been in box 7. Thanks.

Zip Code: cpa@mdtaxes.com