How to start my tax filing on turbo tax Home and business

[tgad1000]

Hi,

I am faced with so many questions and I don't know how to start. I use to start by myself first, and then enter my wife information. however, this year, my wife hired me to do some work for her for her business, and therefore, I need to use the 1099 NEC that she issued for me to file my taxes.

So I decided to start with her, since Turbo tax asked if I want to issue a W2 or a 1099. However, when I did that, it has give another to whether I choose to do employee form online or on my computer. it says online is recommended. I am not sure, what should I do? this is my first time doing this. Please explain and elaborate.

Best...

Tarek

[VolvoGirl]

You are in the wrong place.  Did your wife already prepare the 1099NEC?  Or does she need to create it?  You still file a Joint return.

Get out of these screens.  Those are just to prepare W2s or 1099s.  Start over with a New Return.

In the Window's Home & Business Desktop program when you start a new return you get 2 choices. To prepare an Individual Tax Return or to prepare W2s or 1099s to give to your employees and sub contractors.

Click the big blue button to Start a New Return or go up to the top black menu bar first item, File-New Tax Return.
Then on the next screen it asks What would you like to do?
If you get a screen with 2 choices, Pick or Check the one that says Start a New Individual Tax Return or says 2023 US Form 1040.

When you get that far and still have questions then post back.  I have Home & Business too so I can make you screen shots.  

[xmasbaby0]

Do NOT change the order of the names on a joint tax return or you will have a big mess on your hands.   You need to stay consistent with past joint returns you have prepared and filed, and keep the names on the Form 1040 in the same order in which they have been shown in the past.

So----if your name is listed first on your 2022 tax return, you keep it that way for 2023.  Wife stays listed second after your name.  Every income screen will have spots with each name on it, so you just have to be careful about whose name you are entering the income under.

[tgad1000]

thank you!

i will follow your advice. How should I enter my 1099 NEC? this is my income for the year 2023?

Best...

Tarek

[VolvoGirl]

How does your wife file her business income?  Does she use Schedule C or file a separate Business return?  If she does schedule C in your personal tax return you do your own Schedule C too.  

Have you used the Desktop program before?  How did you do 2022 tax return?  

1099NEC is self employment income and you HAVE to file it on Schedule C, especially to be counted as earned income. You need a Net Profit on Schedule C to show earned income.  I would forget about entering the 1099NEC or 1099Misc. Just enter the total as Other self employment income or as Cash or General income. You don't need to enter each 1099NEC or 1099K. You can enter all your income as Cash. Only the total goes to schedule C.

Have you started your tax return yet?  Were you able to transfer from 2022?  Home & Business will first take you though the Personal Info part to enter your names, address, ssn and dependents.  Then it takes you though the Business tab.  You fill out  your 1099NEC income there.  

[tgad1000]

thank you!

I am using the turbo Tax home and business software. this is my wife first year to file a business return. some people recommended to file as S-corp.  I don't understand between filing S-corp and schedule C. I'm very new to this. I appreciate if you can explain the difference.

Best..

Tarek

[VolvoGirl]

A S corp files a separate business return.  It is for Single Member LLC that elects to be a S corp with the IRS.  It is a 1120-S return.  You have to buy a separate Business program to do a S corp return.   Is she a LLC?  That's about all I know about S corp.  

Otherwise she files a schedule C in your personal tax return.  Schedule C is a disregarded entity.   Maybe this first year you should go to a local accountant or tax place to get started or to set up the S corp.  You will both need to file Schedule C for each of you.  

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 need to report all your income even if you don't get a 1099NEC, 1099K or 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 1099NEC it will ask if you had any income not reported on a 1099NEC. You should be keeping your own records. Just go through the interview and answer the questions. Then you will enter your expenses.

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. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040. The SE tax is already included in your tax due or reduced your refund. The SE tax is in addition to your regular income tax on the net profit.

Turbo Tax Beginners Tax Guide for the Self Employed
https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...

Here is some IRS reading material……
IRS information on Self Employment
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

Publication 535 Business Expenses
https://www.irs.gov/pub/irs-pdf/p535.pdf

Publication 334, Tax Guide for Small Business
https://www.irs.gov/pub/irs-pdf/p334.pdf

[tgad1000]

thank you for taking the time!

Now can my wife issue  1099 NECs for a contractors ? Let me know.

Best...

Tarek

[VolvoGirl]

Oh she hasn't done one  yet?  You need to give a 1099NEC to anyone you paid $600 or more to for the year. But not to corporations or for merchandise. You send the IRS a copy of the 1099NEC with the transmittal summary form 1096. These are due to the person by Jan 31 and to the IRS by Jan 31 also.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Forms-and-Associated-Taxes-for-Indepe...

You were in the right spot originally.    Start a New Return.  

You can do them 2 different ways from the Windows Desktop Home & Business program. Either Online using Quick Employer Forms (QEF) -or- directly on your computer with the built in W2/1099 Reporter. If you use the Reporter on your computer you have to mail them to the IRS and not efile.

In the Window's Home & Business Desktop program to Prepare W2s or 1099s, on the first main screen there are 3 ways to start. Either click on the blue button Start a New Return or click on Create 1099/W-2 or go up to File-New Tax Return.

If you click on Start a New Return you will get 2 choices, Check the second 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 (Recommended) or On My Computer.

[tgad1000]

Thank you!

How am i suppose to send the 1099 NEC to IRS before january 31st. I thought I can send this with my whole tax filing before April 15th, the same I do every year. Please explain.

Best...

Tarek

[VolvoGirl]

You either mail it or efile  it  using QEF Quick Employer Forms.  It  doesn't go with your tax return.  You have to give a copy to the person you paid by Jan 31.  That is for 1099NEC you issue.  If you receive a 1099NEC you enter it on your personal tax return.  Two different things, issuing and receiving a 1099NEC.  2 different kinds of tax returns.  

A 1099NEC you receive goes on your Schedule C in your 1040 tax return.  

[tgad1000]

How can she file the 1099 NEC online? And then refer this in her Turbo Tax income tax?

[ThomasM125]

When you enter into the business section in TurboTax, on the page that says Your (name of business) Business, you will see  a section for Business Expenses, where you need to click on Other Common Business Expenses:

Then you will see an option for Contact labor, and when you click on that option, you will see an option for Create and file W-2's and 1099's online with TurboTax Quick Employer Forms. Use the link there to prepare your 1099-NEC form. On the bottom of that page, you will see an option to enter a description and amount paid for the subcontract labor expense.