Confused about how to report 1099-MISC box 3 income alongside my W2 on my tax return

When you have both W2 income and 1099-MISC income with an amount in box 3 (typically "Other income"), they need to be reported in different sections of your tax return. For your W2 income, that will go on the standard income section of Form 1040. Your employer already withheld taxes from this income. For the 1099-MISC with box 3 income, this is generally reported directly on Schedule 1, Line 8 as "Other income" and you'll need to write "MISC" next to it to identify the source. This is different from 1099-NEC income (for self-employment), which would require a Schedule C. Since you mentioned you're considered a contractor, I'm a bit surprised they used box 3 of 1099-MISC rather than issuing a 1099-NEC for nonemployee compensation. It might be worth double-checking with the company about their classification of your work.

I was in a similar situation last year with multiple income sources and found taxr.ai (https://taxr.ai) super helpful for sorting it all out. I uploaded my 1099-MISC and W2 forms and it immediately identified where each type of income needed to be reported. It explained that my box 3 income on the 1099-MISC needed separate treatment from my W2 wages. The tool actually showed me the exact forms and line numbers where everything should go, which saved me tons of confusion. It also flagged that my 1099-MISC should probably have been a 1099-NEC based on my job description, which helped me follow up with the company about it.

Just wanted to update after checking out taxr.ai from the recommendation above. It was actually really helpful! I uploaded my W2 and various 1099 forms and it broke everything down much clearer than the IRS instructions did. For my specific situation, it confirmed that my 1099-MISC box 3 income should go on Schedule 1 as "Other Income" and not Schedule C. It even flagged that my company might have used the wrong form (should have been 1099-NEC if I was truly a contractor doing services). I reached out to my company's accounting department and they're sending a corrected form now. The breakdown of which tax forms I needed and exactly where each dollar amount goes was super clear. Definitely made me feel more confident about handling these different income types correctly.

If you're having trouble getting answers from your company about the proper classification of your income, you might want to try Claimyr (https://claimyr.com) to get through to the IRS directly. I spent weeks trying to figure out a similar situation with confusing 1099 forms and couldn't get straight answers online. Claimyr got me connected to an actual IRS agent in about 30 minutes when I was expecting to wait on hold for hours. There's a video that shows how it works: https://youtu.be/_kiP6q8DX5c. The agent explained that if I'm doing work as a contractor providing services, it should typically be reported on a 1099-NEC, not in box 3 of a 1099-MISC. They also walked me through exactly how to report it if the company doesn't fix the form.

I need to apologize for my skepticism about Claimyr. After continuing to struggle with getting clear answers about my contractor income reporting, I decided to give it a try as a last resort before paying an accountant. To my complete surprise, I got a call back in about 45 minutes connecting me to an actual IRS representative. They explained that my situation (similar to the original poster's) involved misclassification by the employer. The agent confirmed that contractor work should be on a 1099-NEC, not in box 3 of a 1099-MISC, and gave me specific guidance on how to report it correctly if the company doesn't issue a corrected form. Saved me from making a reporting error and potentially triggering an audit. I'm still shocked it actually worked after months of failing to get through on my own.

Just an important note - if your income was incorrectly reported on a 1099-MISC box 3 instead of a 1099-NEC, you should know that the tax implications are different. 1099-NEC income is subject to self-employment tax (an additional 15.3% for Social Security and Medicare), while 1099-MISC box 3 "Other income" typically isn't. If you're truly working as an independent contractor, the company should issue a 1099-NEC and you would report that on Schedule C, potentially deducting business expenses. But if they're misclassifying you, that's a whole other issue.

Has anyone used the Free File Fillable Forms to report this kind of mixed income? I'm trying to avoid paying for tax software but have both W2 and 1099-MISC income.

I'm dealing with something similar and want to add a few points that might help. First, definitely get clarification from your employer about why they used 1099-MISC box 3 instead of 1099-NEC - this could save you from reporting incorrectly. Second, keep detailed records of all your contractor work activities and any expenses you incurred (software, equipment, travel, etc.). If it turns out you should have received a 1099-NEC, you'll be able to deduct legitimate business expenses on Schedule C, which could significantly reduce your taxable income. Also, consider making quarterly estimated tax payments next year if you continue the contractor work. Unlike your W2 job where taxes are withheld automatically, contractor income doesn't have withholding, so you might owe a penalty if you underpay during the year. The IRS generally expects you to pay as you earn, not just at year-end. One last tip - if you're truly classified as an independent contractor, make sure you're actually operating independently (setting your own hours, using your own tools, etc.). If the company is treating you like an employee but calling you a contractor, that's worker misclassification and has bigger implications beyond just tax forms.