You must report all annual income on your 1040 tax statement, regardless of the source. W-2 income is reported on line 7, “wages,” whereas 1099 income is reported on Schedule SE.
1099 income is counted towards your total taxable income for the year in order to determine your income tax rate and your amount owed.
Additionally, 1099 income incurs a separate tax-related to unpaid Social Security and Medicare contributions, totaling 15.3% of all taxable 1099 income.