Work for my wife

[tgad1000]

My wife started her company and I did some marketing research for her. is recommended to get a W2 or 1099. which one you recommend so I can pay social security and medicare taxes?

[Bsch4477]

You would be paying into social security and Medicare either way but since you’re an employee you would receive a W-2. 

[tgad1000]

It is follow up question? how do I pay social security tax when I receive a 1099 form from my wife? How can I do that on Turbo Tax? please elaborate.

[VolvoGirl]

If you get a 1099NEC you would have to fill out  your own schedule C for self employment.  Then you pay Self Employment tax on your net profit.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare (FICA). So you get social security credit for it when you retire.  The SE tax is already included in your tax due or reduced your refund. It is on the 1040 Schedule 2 line 4 which goes to 1040 line 23. The SE tax is in addition to your regular income tax on the net profit.

If you are not an employee and get a W2 you need to send in quarterly estimated tax payments to cover any regular tax and SE tax.  

The 1040ES quarterly estimates are due April 18, June 15, Sept 15 and Jan 16, 2024. Your state will also have their own estimate forms.

How to make the Estimated payments
https://ttlc.intuit.com/community/tax-payments/help/how-do-i-make-estimated-tax-payments/00/25875

Here are the blank Estimates and instructions…..
https://www.irs.gov/pub/irs-pdf/f1040es.pdf

Or you can pay on the IRS website. Be sure to pick 2023 1040ES payment
https://www.irs.gov/payments

[DoninGA]

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@tgad1000 wrote:

It is follow up question? how do I pay social security tax when I receive a 1099 form from my wife? How can I do that on Turbo Tax? please elaborate.

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If you were paid $400 or more then you would complete a Schedule C for your self-employment income and expenses.  The Schedule C would be included with your federal tax return Form 1040 that you file with your spouse when filing jointly.  You pay Self-Employment taxes on the net income you receive from self-employment.  The Self-Employment taxes are reported on your federal tax return and they are the Employer/Employee portions of Social Security and Medicare taxes combined.

[VolvoGirl]

So if your wife is also filing Schedule C for her business be sure to assign each schedule C to the right person.   You will need to use the Online Premium version to fill out schedule Cs or any of the Desktop CD/Download programs.  

[Opus 17]

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@tgad1000 wrote:

It is follow up question? how do I pay social security tax when I receive a 1099 form from my wife? How can I do that on Turbo Tax? please elaborate.

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Let's go back.

It might be appropriate for you to be an employee and receive a W-2 (in which case, your wife's business has some extra responsibilities, unless she already has other employees).  It could also be appropriate to be considered an independent contractor (consultant/self-employed).  It depends on the nature of the business relationship, and how the work was controlled.  Although, the IRS won't dispute either way and will only get involved if the employee or contractor complains they were mis-classified.

https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-o...

If you are treated as an independent contractor, your wife issues a 1099-NEC if she paid you more than $600.

You file a schedule C with your tax return listing yourself as a business.  You can do this even if you are also a W-2 employee of someone else.  Your wife may also be filing a schedule C depending on how her business is organized, this is also perfectly fine to have more than one schedule C, just be sure that you put the income and expenses for each business on the correct schedule C.  

You will list your gross income, your expenses, and pay self-employment tax and income tax on your net profit.  Self-employment tax is the self-employed person version of social security and medicare tax. 

[Opus 17]

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@DoninGA wrote:

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@tgad1000 wrote:

It is follow up question? how do I pay social security tax when I receive a 1099 form from my wife? How can I do that on Turbo Tax? please elaborate.

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If you were paid $400 or more then you would complete a Schedule C for your self-employment income and expenses.  

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The $400 limit only applies if this is the taxpayer's only income.  If the taxpayer has other income, or files a joint return with their spouse, they must report all their self-employment income and expenses  even if the net profit is less than $400.  

[tgad1000]

Thank you for your reply!

once I declare the income of the 1099! does turbo tax trigger the payment of the social security tax? Or I have to find schedule C and starting this myself manually. Please explain.

I appreciate your patience with me.

[tgad1000]

one more thing about the 1099NEC. Is this form in turbo tax? so my wife income tax will declare that she made this payment to me, and therefore, this will trigger turbo tax to bring this form so she fill it?

[tgad1000]

she usually gets the turbo tax business premium, is that good enough? she is planning to file her company as S corp. Any recommendation?

[VolvoGirl]

Yes the 1099NEC is in Turbo Tax.  But 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.

How to enter income from Self Employment
https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

OH, do you need to know how she fills out and enters the 1099NEC to give to you?  You can prepare W2 and 1099NEC & 1099MISC in either the Desktop Home & Business program or the Online Premium version. If you are using the Home & Business version are you on Windows or Mac? The Mac version only lets you use the Online Quick Employer Forms and efiles the 1099NEC & 1096 Transmittal form.

How to prepare 1099Misc & W2
https://ttlc.intuit.com/community/forms/help/how-do-i-create-w-2-and-1099-forms-in-turbotax/00/25869

The 1099NEC she prepares will not trigger the schedule C for you.  You need to do your schedule C manually.  She will have to enter the 1099NEC she gives you as an expense on her schedule C line 11 for Contract Labor.  

[VolvoGirl]

Premium is good for your personal 1040 return.  BUT now you said she has a S corp?  That is totally different.  She won't be fillling out schedule C in the personal return.  She will get a W2 or K-1 from the S corp to report on your personal return.

Sorry you will need 2 programs. The Business program and a personal version. For your personal return you can use either the Online Premium or buy any of the Desktop CD/Download programs for Windows or Mac. All the personal Desktop programs have the same forms, you get more help in the higher versions.

For the S corp you will need to use Turbo Tax Business.  TT Business is not available to do online or on a Mac. You can buy the Windows Desktop Business program here,
https://turbotax.intuit.com/small-business-taxes

Window System Requirements
https://ttlc.intuit.com/community/system-requirements/help/minimum-system-requirements-for-turbotax-...

[Opus 17]

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@tgad1000 wrote:

Thank you for your reply!

once I declare the income of the 1099! does turbo tax trigger the payment of the social security tax? Or I have to find schedule C and starting this myself manually. Please explain.

I appreciate your patience with me.

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In your wife's case, as part of her business tax return, she will indicate that she paid a subcontractor.  I believe that will trigger Turbotax to produce the 1099-NEC, although I have not used this particular function.  The 1099-NEC needs to be e-filed with the IRS, with a paper or electronic copy going to the subcontractor who was paid (you).

In your case, if you are already using turbotax self-employed (online) or home & business (desktop), the easiest thing to do will be to add a business for yourself, then enter the 1099-NEC.  (If you enter the 1099 first, the program should prompt you to create a business, but it would be simpler to manually create the business.). 

You should end up with one tax return that contains multiple documents -- all your other deductions, credits, dependents and any other income, and also a schedule C (for you) that reports your income and expenses, and a schedule SE (for you) that calculates and pays the self-employment tax.  If your wife's business is also on a schedule C, then your one overall tax return will contain two schedule Cs and two schedule SEs. 

[tgad1000]

I am on windows, but she has to fill her expenses first on schedule C. so her tax has to be done first.