I did not pay any federal income tax, social security tax nor Medicare tax on the 2012 1099-MISC reported amount; nothing withheld, nothing paid. Full amount billed, full amount paid. I simply redeemed lawful money on all checks related to the total $79k. No obligation to file, no 1040 filed. Perhaps you're thinking, it cain't be this easy. Well I'm here to tell you it is. No income taxes paid since 2007.