can`t define status to file taxes

[zarema1988]

I don`t know what tax form should my husband file. So, he works at the car service ( tinting car windows). He is payed daily at the end of the day ( sum depends on how many clients he has served). Now we need to file taxes and i don`t understand how... his boss doesn`t pay taxes for him, no insurance and so on. He doesn`t provide 1099 form also... is my husband sole proprietor? self employed? contractor?

Help me please define my husband`s status and how to file taxes in his case.

I have W2 form and its super easy

[VolvoGirl · Accepted solution]

Contractor/sole proprietor/freelance etc.  are all the same thing.  It's all self employment income.  You file a Schedule C in your personal 1040 return.  

You can enter Self Employment Income into Online Deluxe but if you have any expenses you will have to upgrade to Premium or use any of the Desktop CD/Download programs.

How to enter self employment income

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

Just enter the total income as Other self employment income or as Cash or General income.  You don't need to get a 1099NEC or 1099Misc or 1099K.  Even if you did you can enter all your income as Cash.  Only the total goes to schedule C.

You use your own name, address and ssn or business name and EIN if you have one.   You should say you use the Cash Accounting Method and all income is At Risk.   

After it asks if you received any 1099Misc or 1099NEC it will ask if you had any income not reported on a 1099Misc. You should be keeping your own records.  Just go through the interview and answer the questions.   Then you will enter your expenses.

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  

The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 Schedule 2 line 4 which goes to 1040 line 23.  The SE tax is in addition to your regular income tax on the net profit.

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf

[DianeW777 · Accepted solution]

You are correct.  Your husband is a sole proprietor and will file Schedule C for self employment.  The links below will get you started.

1. You will need TurboTax Desktop Basic or higher or TurboTax Online Self Employed.  If you like using online just get started and TurboTax will upgrade you as needed.
2. It's not important whether your husband received any income documents.  It is important for him to have the information for all income he received.  This can come from a log he might have kept or you can use your bank statements.  Whatever you need to calculate all of his income.
3. Next, any expenses that were directly attributable to being able to earn this income will be deductible.  Do not include any personal expenses.
4. There could also be expenses for operating his own vehicle for business use.
5. Use your home address as the business address if there is not a separate location.
6. The Business Activity Codes can be found using the link provided.
   1. What is Schedule C?
   2. How do I report income from self employment?
   3. What self employment expenses can I deduct?
7. There are many useful tips by VolvoGirl as well