tomcoxoh
New Member

I have a 1099-misc i received as an independent contractor. Ohio tax form asked how much was business income? Do I put in the total amount on the 1099-misc?

Ohio tax form asked about my business entities.  I earned this income as a technical writer and an independent contractor.  The page is titled 'How much of this amount qualifies as business income?'  If I earned it as a technical writer, is it considered a business income?  If I enter the entire amount, then the next page says the total amount (what I earned) will be deducted from my taxable income.  I don't know what I should put in there.   Thanks.  Tom

JulieCo
New Member

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Yes, Ohio allows the first $250,000 of business income earned by taxpayers filing “Single” or “Married filing jointly,” and included in federal adjusted gross income, to be 100% deductible. For taxpayers who file “Married filing separately,” the first $125,000 of business income included in federal adjusted gross income is 100% deductible. This is commonly referred to as Ohio’s Business Income Deduction (BID). Any remaining business income above these thresholds is then taxed at a flat 3% rate.  Only business income earned by a sole proprietorship or a pass-through entity generally qualifies for the deduction.

See this link for more information about Ohio's Business Income Deduction:  https://www.tax.ohio.gov/Individual/BusinessIncomeDeduction.aspx




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Hal_Al
Level 15

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Yes, you put total amount of your net business income.  If you did not deduct any business expenses, from the 1099-misc amount; then that is the amount of your small business deduction (SBD).

Essentially, Ohio does not tax small business income, under $250,000.

mt305700
New Member

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I was wondering if you or someone can follow up on this message, as I'm in a similar situation. I am an independent contractor with my income reported on a 1099-misc, but I do not have an LLC or have a business registered in any way. I'm just me. The Ohio tax forms require me to report the 'entity' ie business name of the business I run. Do I just put my name there or 'not applicable' or 'independent contractor'? Or by not having a business that I push my income through does this make me ineligible to claim the small business deduction? (until/unless I register a business that I pass my income through)

 

Thanks!

Hal_Al
Level 15

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@mt305700 

You just put your name there as the business name, the same as you do on federal Schedule C. The fact that you have a 1099-Misc, with income in box 7 and report that income on federal Schedule C makes you eligible for the Ohio BID (business income deduction)