If you have net self
employment income of $400 or more you have to file a schedule C in your
personal 1040 return for self employment business income. You may get a 1099-Misc
for some of your income but you need to report all your
income. So you need to keep your own good records. Here is some
reading material……
IRS information on Self Employment….
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center
Publication 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
There is also QuickBooks Self Employment bundle you can check out which
includes one Turbo Tax Home & Business return and will help you keep up in
your bookkeeping all year along with calculating the estimated payments needed
....
http://quickbooks.intuit.com/self-employed
Self Employment tax (Scheduled SE) is generated
if a person has $400 or more of net profit from self-employment on Schedule
C. You pay 15.3% for 2014 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. You do get to
take off the 50% ER portion of the SE tax as an adjustment on line 27 of the
1040. The SE tax is already included in your tax due or reduced your
refund. It is on the 1040 line 57. The SE tax is in
addition to your regular income tax on the net profit.
PAYING ESTIMATES
For SE self employment tax - if you have a net
profit (after expenses) of $400 or more you will pay 15.3% for 2015 SE
Tax on 92.35% of your net profit in addition to your regular income tax on it.
So if you have other income like W2 income your extra business income might put
you into a higher tax bracket.
You must make quarterly estimated tax payments
for the current tax year (or next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax
for the current tax year, after subtracting your withholding and credits.
- 2. You expect your withholding and credits to
be less than the smaller of:
90% of the tax to be
shown on your current year’s tax return, or
100% of the tax shown on your prior
year’s tax return. (Your prior year tax return must cover all 12 months.)
To prepare estimates
for next year, You can just type W4 in the search box at the top of your return
, click on Find. Then Click on Jump To and it will take you to the estimated
tax payments section. Say no to changing your W-4 and the next screen will
start the estimated taxes section.
OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start
or Update button
