topic How do I answer these questions on the 1099R income? I have no employees, pay no one, and have no method of accounting. I just receive a check for work done. in Retirement tax questions

How do I answer these questions on the 1099R income? I have no employees, pay no one, and have no method of accounting. I just receive a check for work done.

Ms-Ohio1 — Sat, 03 Apr 2021 17:53:51 GMT

I work as an independent contractor, and receive a check for work done. How do I answer all these business questions?

Re: How do I answer these questions on the 1099R income? I have no employees, pay no one, and hav...

KathrynG3 — Sat, 03 Apr 2021 18:26:51 GMT

This question is likely not regarding Form 1099-R income--it is asking you if anyone worked for you.

If anyone was paid more than $600 by you, then you would have needed to send them Form 1099-NEC, the new form that replaces Form 1099-MISC for nonemployee compensation. (Form 1099-R is for retirement distributions.)
When someone agrees to work for you, get them to fill out Form W-9, for your records. Use this information to issue Form 1099-NEC and stay in compliance with the IRS.
- Form W-9 does not get turned in anywhere. It is for your use to complete and send Form 1099-NEC to each person earning more than $600.
- This establishes that you are not their employer and therefore these workers are responsible to pay their own taxes. See: Am I considered self-employed?

You may have received Forms 1099-NEC for your work done, yourself, too, since you are self-employed. All income received for jobs should be reported. All expenses you have should be included to offset the income.

The method of accounting is commonly cash basis, when you recognize income and expenses by when the cash hits your bank account.

The other main option is accrual basis, when you secure the job or order the goods, but the money has not yet been paid/received.

Look for the blue Learn more links when questions are asked. These open short explanations for what is being asked so you know better how to answer.

For more information, see: Self-employed and small business resources for your 2020 taxes.

Re: How do I answer these questions on the 1099R income? I have no employees, pay no one, and have no method of accounting. I just receive a check for work done.

stevemarx — Tue, 22 Feb 2022 18:12:27 GMT

I am a part-time independent contractor who receives non-1099R payments from various sources for my work. Does Turbotax offer a package to help calculate my self-employment taxes?

Re: How do I answer these questions on the 1099R income? I have no employees, pay no one, and have no method of accounting. I just receive a check for work done.

VolvoGirl — Tue, 22 Feb 2022 18:15:34 GMT

First of all it's a 1099NEC. A 1099R is for IRA and pensions.

Yes Turbo Tax covers self employment independent contractor income. It's very common.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. Here's a Schedule C https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

You can 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 use any of the Desktop CD/Download programs.

How to enter self employment income

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/26653

You will need to keep good records. You may get a 1099NEC at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small and if you don't get the 1099NEC.

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 1099Misc or 1099NEC it will ask if you had any income not reported on a 1099Misc. 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.

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 15. The SE tax is in addition to your regular income tax on the net profit.

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 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