1099-misc for subcontractor.

[bobandia]

I will be receiving a 1099-MISC for work.  How do I pay the subcontractor I hired to help me?  

[VolvoGirl]

First of all you need to use the Online Self Employed version or the Desktop Home & Business program.

If you paid anyone $600 or more you need to give them a 1099Misc.  But not to corporations or for merchandise. You send the IRS a copy of the 1099Misc with the transmittal summary form 1096. These are due to the person by Jan 31 and to the IRS by Jan 31 also.

That is Contract Labor on Schedule C line 11.

How to enter Contract Labor

https://ttlc.intuit.com/community/entering-importing/help/how-do-i-enter-contract-labor/00/27407

[VolvoGirl]

If you need to issue a 1099Misc.  How to create W2s and 1099

https://ttlc.intuit.com/community/forms/help/how-do-i-create-w-2-and-1099-forms-in-turbotax/00/25869

[bobandia]

Great!  I am using Home and Business.  How do I enter my info.  I don't have a business.  The company just asked me to do the work and I hired someone to help me.

[VolvoGirl]

But do you get paid with a W2 or a 1099Misc?  If you are an employee and get a W2 then what you paid to the subcontractor is not deductible on your return.  And you don't have to give out a 1099Misc.

Or are you filing as self employment?  Then you do have a business for yourself and fill out schedule C.

[VolvoGirl]

Sorry I see you did say you are getting a 1099Misc.

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.  You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

For the future, you should use a program like Quicken or QuickBooks to track your income and expenses.  There is a QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....

http://quickbooks.intuit.com/self-employed

You need to report all your income even if you don't get a 1099Misc. You use your own records.  You are considered self employed and have to fill out a schedule C for business income.   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 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.

FOR 2019

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.  

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

[VolvoGirl]

Now back to preparing the 1099Misc.  Are you using Home & Business on Windows or Mac?  They are different.

In the Window's Home & Business or Business Desktop program to Prepare W2s or 1099s, go to Start a New Return or File-New Return.

Then on the next screen it asks What would you like to do?

Check the circle that says Prepare W-2s and 1099s for my employees or contractors.  Then that will expand and give you a choice to prepare them online or on your computer.

If you select to do them online using the Quick Employer Forms the forms are efiled to the IRS.  You then print the copies to give out to your people and print copies for yourself.  See this for more info…..

https://ttlc.intuit.com/community/forms/help/what-is-quick-employer-forms/00/25916

If you select to do them on your computer you are responsible to mail the forms to the IRS.