My husband is considered an independent contractor. He works for a guy who pays him in cash or personal checks. They don’t take out taxes and don’t report his wages to the irs. How would I report them for taxes or do I need to?
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Yes you have to report his self employment income. You need to fill out schedule C for self employment business income and pay self employment tax in addition to regular income tax on it. The SE tax is to pay Social Security and Medicare tax that wasn't taken out like on a W2.
You use your own name 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 you put in your income and expenses if your net profit is $400 or more you will pay 15.3% for Self Employment tax in addition to your regular income tax. The Schedule SE will be automatically filled out for it.
You can enter Self Employment Income into Online Deluxe but if you have any expenses you will have to upgrade to the Premium version. Or use any of the Desktop installed programs. All the Desktop programs have the same forms. You just get more help and guidance in the higher versions.
How to enter income from Self Employment
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
Turbo Tax Self Employed Tax Hub
https://turbotax.intuit.com/personal-taxes/self-employment-taxes
Turbo Tax Self Employment info
https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...
You should report the income from his self-employment on Schedule C. You are also able to deduct expenses from this work.
Here's how to report your business in TurboTax Online:
Thank you for the help
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