TurboTax® Tax Preparation Software, FREE Tax Filing, Efile Taxes, Income Tax Returns I'd think that would walk you right through it, and it's free to use, until you file.
This is a discussion on 1099 within the Off Topic & Humor Discussion forums, part of the The Back Porch category; This year I'll be a 1099 employee/contractor. Does anyone have any advice they would like to share with me on how i need to get ...
This year I'll be a 1099 employee/contractor.
Does anyone have any advice they would like to share with me on how i need to get this set up etc?
Is there a list of what's considered a write-off?
How do I pay fed/state taxes?
What about SSI?
Did I miss something?
I apologize for the confusion, I'll be filing a 1099 next Jan. I just started a new job that will have me as a 1099.
Talk to your accountant. If I understand you correctly, it is starting this year, meaning it will be filed for 2010. Just ask your accountant about it when you are filing your 2009 taxes.
If you don't have one, then set up a consultation. Go over it. Maybe even consider having them walk you through it for the first or second tax years until you are comfortable with it. It will cost you a few dollars, but it could save you some future heartache.
I will support gun control when you can guarantee all guns are removed from this planet. That includes military and law enforcement. When you can accomplish that, then I will be the last person to lay down my gun. Then I will carry the weapon that replaces the gun.
Pretty much every expense is a write off for doing work off a 1099. Keep everything (receipts), that subtracts from your net income. You may need to pay quarterly withholding. If you still have a regular job where your employer is paying your withholding and the 1099 work is not significant then I would probably not pay the quarterly.
Yoda, I am, yes.
yes you're correct, I'll be filing this way in 2010.
I'll look for an accountant ASAP. unless there's one here on the forum that can give some advice.
You'll have to pay quarterly estimated taxes call state and feds they will send you the forms.
You will be considered self-employed, so all work related expenses will be deductible.
You'll need your own insurance etc.
While people are saying "Peace and safety," destruction will come on them suddenly, ... and they will not escape. 1Th 5:3
Here's a good place to start:
Forms and Publications
Look at these IRS Guides:
334 Tax Guide for Small Business
535 Business Expenses
That will give you a lot of detail and answers.
You'll need to make "Quarterly Estimated Tax Payments" on April 15, 2009; June 15, 2009; September 15, 2009 and January 15, 2010 in lieu of the tax withholding you're used to.
Also review the instructions to the 1040 Form for Schedule C, which is the tax form you'll probably use.
You may want to consider using an LLC or S Corporation for your business too - mainly for liability protection.
\If I were you I'd find a good CPA now, and have them help you get set up correctly. Consider Quicken, QuickBooks and stay on top of it.
Good luck, and congratulations!
ΜΟΛΩΝ ΛΑΒΕ: Buy These Stickers Here
"A man without ethics is a wild beast loosed upon the world" Albert Camus
And don't forget that you have to pay your entire social security tax and Medicare tax, quarterly.
I hope you have allowed for this additional significant expense in the price you will receive as a contractor instead of an employee.
Similarly, your price as a contractor needs to take into account what it will cost you to get health insurance, and to create some sort of retirement account--I don't think they are 401Ks, but are called something else for the self-employed, and have higher limits for the amount that can be deposited each year.
All in all, you probably need for you total compensation to be roughly 50% higher as a self-employed contractor than as an employee to take care of the expenses usually borne by the employer.
Also, notwithstanding what the people who hired you are calling you, you may not actually be a contract employee and they may be liable for these taxes. You need to take a careful look at the IRS rules used to determine if you are self-employed or employed. There are lots of factors; your freedom in making decisions, who supplies the tools used to accomplish the job, and more, who sets the hours, and more.
Lots of small and medium sized companies play fast and loose with these things hoping to rip-off the unsuspecting and reduce their payroll while simultaneously lowering their costs for getting a job done. And sometimes, probably a lot more frequently than we all would like to think, the company that switches to "contract" help is breaking the law.
From the IRS WEB SITE
Form 1099-MISC & Independent Contractors
Question: How do you determine if a person is an employee or an independent contractor?
Answer: The determination is complex, but is based on who has the right to control how, when, and where the person performs services. It is not based on how the person is paid, how often the person is paid, or whether the person works part-time or full-time.
There are three basic areas which determine employment status:
Financial control and
Relationship of the parties
For more information on employer-employee relationships, refer to Publication 15, Circular E, Employer's Tax Guide and Publication 15-A (PDF), Employer's Supplemental Tax Guide.
If you would like the IRS to determine whether services are performed as an employee or independent contractor, you may submit Form SS-8 (PDF), Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.
Generally you should report your nonemployee compensation on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit From Business. You need to pay self-employment tax on your net earnings from self-employment on Form 1040, Schedule SE (PDF), Self-Employment Tax if you had net earnings from self-employment of $400 or more.
Generally, there is no tax withholding on this income. Thus, you may have been subject to the requirement to make quarterly estimated tax payments. If you did not make timely estimated tax payments, you may be assessed a penalty for an underpayment of estimated tax. Employees pay into the social security and Medicare trust funds, as well as income tax withholding, through payroll deductions.
Last edited by Hopyard; January 28th, 2009 at 05:38 PM.
The pubs that Rock and Glock listed are a good starting point.
Depending on what type of work your going to be doing, talking to a good tax person, accountant, or whomever that know what they are doing will go a long way. Although this isn't necessarily the best time to be just sitting and chatting with us, since it is our most hectic time of year.
You do need to consider making estimated payments, but the IRS will not send you the forms, since this is your first year. The 1040ES forms are available for download off the IRS website.
Best advice is not to just listen to someone who was once self employed and "this is the way I did it". That is liable to get yourself into trouble.
If you have a specific question, feel free to message me.
Just remember that shot placement is much more important with what you carry than how big a bang you get with each trigger pull.
Texas CHL Instructor
Texas Hunter Education Instructor
My head is spinning. all i can say is WOW!.
i'm going to have to reread all of this information, and Farronwolf you will deffenatly be getting some PM's from me.
Especially since i'm a native TEXAN..
Definitely consult an accountant who knows this stuff.
I did a year as a 1099 consultant, and ended up getting boned hard by the IRS. Because you won't have an employer contributing to your SS and Medicare taxes, you'll end up paying more in taxes than you would have as a W-2 employee.
Battle Plan (n) - a list of things that aren't going to happen if you are attacked.
Blame it on Sixto - now that is a viable plan.
Are you selling only this companies IT programs. Will you be selling other peoples products? Are you buying the product and then reselling it? Are you working on their schedule? Even though you may be getting a 1099 you may be an employee of this company. I would also check with a disability attorney to see if you are independent or employee.
The way it was told to me is like this. You own your own black Town car and you work for many limo companies picking up people when you decide to work. You don't feel like working nobody is calling you to find out were you are. If you never showed up for work again nobody would care. They you would be getting a 1099 oppose to a W-2.