Caught in a confusing 1099-MISC tax debt

Forum|Forum|5 years ago
March 19, 2021
3 replies
23 views

I'm asking about Tax Year 2018. I'm one of those people caught in a 1099-MISC tax debt which is very difficult to figure out.

I was a Web Dev for a non-profit and also a driver for an oil field company which would send me out for crazy hours. I was also in seminary for the first half of 2018 but the school was not accredited.

I have done all I can to gather deduction and expenses for both 1099-MISC.

My total income was just over $20,000

My taxable income is just over $7,000 after deductions.

So why do I owe over $3500??????

TurboTax 2018 Deluxe is not finding any problems and is ready to file!

fanfare

Level 15

It is not a mystery.

When you are paid via 1099-MISC, no SE taxes (social security) were paid by your boss.

You have to pay it. You also pay the medicare tax.

mhtaxesAuthor

Level 2

But What is the point of deductions bringing my income down to ~$7,000 if the tax debt remains ~$3,500?

I suppose there is no way to get a reduction.

Meanwhile... I haven't gotten a single stimulus...

Mike9241

Level 15

another way to put this is that you owe about 15% social security/medicare taxes (ie self-employment taxes) on your net schedule C income. if it was $20K you would owe about $3,000 in self-employment taxes + regular taxes on your taxable income of $7K. $3500 in taxes is not out of whack with what you have told us. Now you not only owe the $3500 you also owe penalties and interest for late payment and filing that are increasing every day. file ASAP. and if you can't pay set up a payment plan for an offer in compromise (where you settle your debt for less than the full amount) you may want to see a tax pro. the IRS knows about the 1099-MISc so it likely to only be a matter of time before they ask you to file.

Mike9241