topic Re: Self employed 1099 in Self employed

Self employed 1099

pearlblack — Wed, 29 Jan 2025 21:36:15 GMT

Re: Self employed 1099

xmasbaby0 — Wed, 29 Jan 2025 20:56:32 GMT

You are self-employed? Are you asking if you need to enter your business expenses on Schedule C---if that is the issue----yes, you do need to enter your expenses. If you claim self-employment income without your expenses, you will be artificially inflating your income for refundable credits----and you would not want to submit an incorrect return, right?

Re: Self employed 1099

pearlblack — Wed, 29 Jan 2025 20:58:10 GMT

Yes I am self employed, yeah no I wouldn't want to do that at all. I was just wondering if I needed write offs with my income being so low

Re: Self employed 1099

pearlblack — Wed, 29 Jan 2025 20:59:40 GMT

Also wondering if write offs lower the amount I made? Or just reduce the tax bill I would owe.

Re: Self employed 1099

xmasbaby0 — Wed, 29 Jan 2025 21:08:28 GMT

Yes----entering your business expenses lowers the amount you made. That is a fact of life when you have a business.

Re: Self employed 1099

pearlblack — Wed, 29 Jan 2025 21:10:03 GMT

Thank you, good to know!

Re: Self employed 1099

VolvoGirl — Wed, 29 Jan 2025 21:12:07 GMT

Actually both. It will reduce the Net Profit which you are taxed on and also reduce the separate self employment tax.

You will pay Self Employment tax (Scheduled SE) on a Net Profit of $400 or more on Schedule C in addition to regular income tax on it. You pay 15.3% SE tax on 92.35% of your Net Profit (If it is 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.

Re: Self employed 1099

KrisD15 — Wed, 29 Jan 2025 21:16:38 GMT

If by "write-offs" you mean expenses you paid in order to earn the income, those will lower your taxable income.

Lower taxable income USUALLY means a lower tax bill.

If your tax bill "Zeros-out", more expenses will not change the tax.

There are also credits based on your income, so more or less income could mean more or less credits which could mean more or less of a refund.

For example, the Earned Income Credit is based on your earned income. That credit goes up to a certain income level, then drops down. For this credit less income could mean more OR LESS credit, thus more or less refund; HOWEVER be aware that the IRS would not view a taxpayer intentionally lowering their income (or NOT claiming expenses to inflate their profit) in order to get a bigger refund as proper. Doing something like that could result in penalties or worst.

The best way to file a tax return is to report everything as honestly as possible.

When you are Self-Employed, you are required to report ALL income and ALL expenses.

@pearlblack