Tax Preparation Employment
November 11th, 2008
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Question: Help with filing my taxes…?
I am working on filing my taxes. They are pretty straight forward in that we are not itemizing. However, we have a new tax form thrown in the mix. We have three w-2s and a 1099 misc. I am assuming, based on research, that this is a self employment form. My husband is basically an independent contractor w/works for another independent contractor. This is my question. On one part of the Tax Preparation Software, it ask if we are responsible for self employment tax. I am not sure if we are supposed to check this box or not. I certainly don’t want to check it and pay 600 dollars if I don’t have too, but I also don’t want to not check it and get in trouble w/the IRS.
Answer: If your husband is an independent contractor and received a Form 1099, he will need to complete a Schedule C that will flow onto page 1 of your Form 1040.
The good news is that he can write off any expenses he incurred while earning this income—-auto expenses, home office, tools, supplies, etc. on the Schedule C to reduce his “bottom line” self-employment income. This will reduce your income tax as well as his self-employment tax.
Self-employment tax for independent contractors is like the social security and medicare tax that is withheld from a regular employee’s paycheck that shows up on a W-2.
Unemployment recipients should plan to pay taxes, too
With both the national and state unemployment rates in the double digits, tax officials are hearing one question more often than usual as the filing season nears. Are unemployment benefits taxable?
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