is gross in come determined before or after tax deductions when filing a 10-99?
April 27th, 2010hi everyone whos smarter than me in the tax world …
i file a 10-99 form- i make a very low income (roughly 15,000 give or take 1000)
i have a few small easy questions for the tax intelligentsia …
1. with this low of an income do i need to file?
2. is my gross income determined before my deductions or after?
3. does my employer report my income quarterly or only once at the end of the year?
thanks if any one can help it would be really awesome ..
thanks a lot .. from a poor broken natural american who’s physically suffering with no insurance while eating preservatives and artificial colors … on a borrowed computer and my neighbors unlock wireless connection ………i would like to think our amazing government for that …
and also a little side note …. where is there a written law that says we have to pay taxes to the IRS anyway??? im just sayin .. i may not know about tax rules but i never read a written law that states … we as citizens of a USA have to pay…
Replys
It’s not clear to me what you mean by "I file a 10-99". Some people get a 1099-MISC for the work they’ve done, and some of these people should have gotten a W-2 instead.
Did you mean "naturalized" American? Please ask the owner of the unsecured wireless if it’s OK to use his connection. Otherwise it is stealing.
If your earnings amounted to $15,000 – $16,000, and you have no dependents and no mortgage interest or real estate taxes, then yes, you will have to file. If you have dependent children, look into the Earned Income Credit. You may be glad you did.
PART 1:
You mention your employer. He should give a W2 to you by January 31. Box 1 has the amount for line 7 of the Form 1040. If you have a very simple situation, 1040EZ will be the one to use. But if you have dependents, or deductible expenses such as mortgage interest, high medical bills, unreimbursed work expenses, then you will need 1040 or 1040A. There is a Schedule M new this year. 1040EZ doesn’t use it, but everyone filing 1040A or 1040 should use it on account of the "Making Work Pay" stimulus to the economy in 2009.
Box 2 of the W2 shows what was held back to pay your income tax. Just guessing, but this might be about $1200. If your tax turns out to be $800, then filing your return will get you back the difference, in this example, $400 tax refund. Boxes 3 and 5 show FICA and Medicare. Nothing you can do about those, sorry! Your employer reports the wages and sends in the withheld tax at least quarterly if not monthly.
If your state has a state income tax, the W2 will show state tax withholding at the bottom. You’ll need to file state income tax too, to get that money back if you can.
PART 2. If you get 1099-MISC.
This is what a contract worker or freelance worker gets. The "employer" doesn’t take out the tax or the FICA or the Medicare. You are regarded as Self-Employed. You’ll use the Form 1040 and Schedule C and Schedule SE. And the Schedule M, the new one.
On Schedule C, "Gross earnings" is before any of the expenses. Expenses depends on what type work you do. If you have no inventory you can leave that section blank. After subtracting the expenses you’ll see what the profit was, and that carries over to Form 1040 on the line for Sch C. If there’s no W2, you leave the Wages, line 7, blank.
Next. You do the Schedule SE. Half the SE tax goes on the 1040 as an adjustment to income. But the entire amount is put into the Other Taxes section on page 2 in addition to the income tax itself.
Unless you paid quarterly estimated taxes, you’ll have to pay some tax. It’s due April 15 whether you file for an extension or not. Better start saving up now.
If you have dependents, there may be some relief in the Refundable Credits section.
I work for a tax preparing company. None of this is specific for your situation. But it may help you get a handle on what needs to be done.
The Tax Code is about 1000 pages. Visit the IRS office and ask to see it. That’s where it’s written down. That’s why people pay me to do their taxes for them…
1099-misc income: You are self employed or independent contractor. You must file your tax return if your self employed income is $400 or more. You will report your income and business related expenses on schedule C or C-EZ (Form 1040). Then you put net income (or loss) on line 12 of Form 1040. This income is subject to SE tax at 15.3% (this is shown on line 57 of Form 1040).
Little side note: File your return, pay any tax due, and relax. Do not create unnecessary problems for yourself by following your little note.
1. with this low of an income do i need to file?
Yes. If your net after expenses is $15K, you will owe tax.
2. is my gross income determined before my deductions or after?
Your adjusted gross income appearing on Page 1 of Form 1040 includes only your net income from self-employment. You subtract your expenses of self-employment before adjusted gross income is figured. Income and expenses of self-employment are figured on Schedule C.
3. does my employer report my income quarterly or only once at the end of the year?
If you are paid on a 1099MISC, you have no employer. The Forms 1099MISC are sent to the IRS annually.
Being American who lives in this country, you should file your income and pay your tax annually.
You need to do it right or you will face some headaches later on.
You must use Schedule C to explain the following: What was your total gross income, outline and explain all expenses you may legally could proof related to your self employment. All expenses you may declare must be supported by receipts, canceled checks, credit cards and must be kept for at least 3-5 years in your possession.
You finally will be paying Federal tax on the NET income after deducting all legit expenses. However, you will pay Self Employment tax for the entire Gross earned income from the 1099. So your tax will be combination of Fed and Self Employment Tax, Plus your local state.
Your employer will provide the IRS with your name, your SS$ and the amount he paid you so he will be able to claim the expenses within his Business income tax return.
Go to this link and learn more how to avoid being in trouble.
http://www.irs.gov/compliance/enforcement/article/0,,id=213765,00.html
YOU NEED PROFESSIONAL HELP DOING YOUR TAXES. From what I’ve read you are in need.
FYI: You are receiving a 1099 and this means that you are self-employed. The guy that paid you is filing the 1099 with IRS "on you" to report your income to the government.
Self-employed people must file when total receipts (amounts you have received without regard to expenses or deductions) are $400 or more.
You will file a 1040 long form with a Schedule C (don’t use C-EZ) and a SE (self-employment tax).
Schedule C is where your 1099 income goes along with the related expenses.
Mileage maybe a good expense for you. When you go in to get your return prepared you need to know how many miles you drove your car in 2009 and how many miles were related to your job.
You might ask your neighbor if you can occasionally use his wireless internet connection and see if he’ll set you up with a password. If he discovers and fixes this himself you’ll be cut-off.
We are sheep living in a land controlled by lions; don’t mess with the King or you’ll be eaten alive.
The line above is a warning- don’t write smart-assed comments on your tax return if you know what’s good for you. I know of a guy that thought there was nothing they could do about it. WRONG
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