topic 1099 tax rate question in Retirement tax questions

1099 tax rate question

joshua-matthew-w — Wed, 05 Jun 2019 01:57:08 GMT

There are a lot of kinds of 1099's. What kind are you as...

xmasbaby0 — Wed, 05 Jun 2019 01:57:10 GMT

There are a lot of kinds of 1099's. What kind are you asking about?

I am currently employed at a recruiting agency in Massach...

joshua-matthew-w — Wed, 05 Jun 2019 01:57:11 GMT

I am currently employed at a recruiting agency in Massachusetts. I work solely on commission and was wondering how much I will owe based on how much I earned. Let's use $20,000 as an example. I am not sure what type of 1099. Will I owe self-employment taxes and personal income taxes? Thank you.

If you mean you all receive a 1099Misc for your earnings,...

xmasbaby0 — Wed, 05 Jun 2019 01:57:12 GMT

If you mean you all receive a 1099Misc for your earnings, then you will owe 15.3% for self-employment tax (for Social Security and Medicare) plus ordinary income tax. You will have to complete a schedule C to deduct any business expenses.

To report your self employment income you will fill out s...

VolvoGirl — Wed, 05 Jun 2019 01:57:14 GMT

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 will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

You need to report all your income even if you don't get a 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 1099Misc 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.  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.

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