So this year i got a 1099 misc form for doing work over the summer. Now it states my income under "non employee compensation". By following the IRS tax book, it claims that i am self employed, thus have to pay like 450 bucks in SE tax, however i don't have a company!!! What should i do about this? I fall under the $8750 limit to not have to file a tax return, but did not get my income from a W2. This is all messed up and could use some help.
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Stupid tax forms!!!
- Thread starter silbeej
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I was self-employed for many years. When I was a teenager, I often owed no income tax but did owe self-employment tax. You file your tax return and pay self-employment tax as a part of your tax return.
You pay just like the rest of us.
http://www.irs.gov/businesses/small/article/0,,id=98846,00.html
They may also hit you with a penalty - nothing major, but don't be surprised if there is a small one.
P.S. This has nothing to do with the forms, just your lack of understanding. If you really are going to continue self employment, either do some more research or get an accountant.
http://www.irs.gov/businesses/small/article/0,,id=98846,00.html
They may also hit you with a penalty - nothing major, but don't be surprised if there is a small one.
P.S. This has nothing to do with the forms, just your lack of understanding. If you really are going to continue self employment, either do some more research or get an accountant.
You should not have to pay a penalty as long as you file AND pay by the 15 April deadline.
I don't know whether you've ever worked for a place that gave you a W-2 at the end of the year. If you haven't, most employed people have to pay Social Security and Medicare taxes. The employer pays half and the worker pays half (which actually means that the worker pays all of it, in the form of reduced wages). Self-employment tax is the equivalent for those who are self-employed.
Also, the lower limit for filing an income tax return if you are self-employed is $400, not $8,750. If you are a dependent, the lower limit is either $850 or $400 if you were self-employed. Even if you don't have to file a tax return, it's always a good idea to.
I don't know whether you've ever worked for a place that gave you a W-2 at the end of the year. If you haven't, most employed people have to pay Social Security and Medicare taxes. The employer pays half and the worker pays half (which actually means that the worker pays all of it, in the form of reduced wages). Self-employment tax is the equivalent for those who are self-employed.
Also, the lower limit for filing an income tax return if you are self-employed is $400, not $8,750. If you are a dependent, the lower limit is either $850 or $400 if you were self-employed. Even if you don't have to file a tax return, it's always a good idea to.
The IRS is a pay as you go system. The penalty I am referring to is known as an underpayment penalty and probably won't apply, since the OP doesn't hit the trigger of $1000 in taxes owed. I found this out last year when I was 1099'd for some side work and failed to make estimated payments. The penalty itself was something like $50, but just worth noting.
I'd say fill out form 2210, just to make sure. Or get an accountant.
http://www.irs.gov/taxtopics/tc306.html