My husband is a truck driver. He works for a company who will 1099 him. They deposit quarterly federal tax to the irs. He just started there in august 2022. This company he is working for does not withhold fica or medi tax. How will this affect

Forum|Forum|3 years ago
November 16, 2022
5 replies
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My husband is a truck driver. He works for a company who will 1099 him. They deposit quarterly federal tax to the irs. He just started there in august 2022. This company he is working for does not withhold fica or medi tax. How will this affect our 2022 tax return.

KochuK

Level 7

Hi Donteresaross thanks for attending the event and post questions.

Your husband self employment would be reported to Schedule C, Profit or Loss From Business with Form 1099 income, and related business expenses. The net income is subject to both income tax and self employment tax.

Schedule C Profit or Loss From Business

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

The net profit from Sch C line 31 will flow to Schedule SE to calculate self employment tax. The formula is approx. net profit x 92.35% x 15.3% (FICA and Medicare taxes).

Self-Employment Tax

https://www.irs.gov/pub/irs-pdf/f1040sse.pdf

You should estimate your tax liability for this year together with what the company submitted on your behalf. If you have a large balance due when filing tax year 2022 taxes, you can effect estimated tax payment via IRS Direct Pay.

https://www.irs.gov/payments/direct-pay

Hope the above helps. Thank you.

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DonteresarossAuthor

Level 2

Thank you for the reply. However, this is a little confusing to us. My husband does not own a business, he drives for a company that will 1099 him and is making federal tax deposits on his behalf. He pays for NO fuel or anything related to his job accept for his own necessities. From what I understand if he is an "EMPLOYEE" fica and medi tax should be done on the employers part. Just not sure why we have to pay in the 15.3% when he is not an owner operator or business owner in the state of nevada. The other guys employed do not pay in for the fica or medi either, so we are confused. If someone can shed a little more light on this issue, it would be much appreciated.

Thank you

VolvoGirl

Level 15

1099NEC is for non employee self employment income. Yes you are the owner of your own self employment business. You are in business for yourself. Use your own info. The people or company that pays you is your customer or client. You need to fill out schedule C for self employment business income. You are considered to have your own business for it. YOU are the business. 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 can fill out Schedule C and enter Self Employment Income into Online Deluxe or Premier but if you have any expenses you will have to upgrade to the Self Employed version. Or buy any of the Desktop programs. All the Desktop programs have all the same forms, but you will get the most help in the Home & Business version.

If the company has been paying in the quarterly taxes for him do they take it out of his pay? It might show up as withholding on the 1099NEC in box 4. If it isn't there you need to know how they are paying it so if he need to get credit for it.

He needs to pay the Self Employment tax on it. 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 (If it is 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 (FICA). You have to pay both the ER & EE part. So you get social security credit for it when you retire.