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I will have one amount reported on my 1099-NEC but this amount included reimbursements for monthly software expenses. How can I show the difference of money for reimbursement and money for compensation for services provided?
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When you fill out schedule C for your self employment you enter the gross amount on the 1099NEC and then you separately enter the software expense which will give you the Net Profit. You will need to use the Online Self Employed version or any of the Desktop CD/Download programs to enter self employment income and expenses.
Thank you...if this is only something that I did two times last year, do I still need to fill out a schedule C? This is not my job- just something that I did a few times to make a little extra money. I don't have a tax ID or anything like that...
Yes ... you fill in a Sch C if you have SE income and expenses to report against it.
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 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 any of the Desktop programs. But you will get the most help in the Home & Business version.
How to enter income from Self Employment
https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...
You might want to use Quicken or QuickBooks to keep tract of your income and expenses. There is one called QBSE QuickBooks Self Employed that works with Online Turbo Tax and will give you a free online tax return next year.
http://quickbooks.intuit.com/self-employed
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 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. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040. The SE tax is already included in your tax due or reduced your refund. 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
Publication 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
I have the desktop Deluxe version. Will this be sufficient?
Yes. All the Desktop programs have the same forms. You can fill out schedule C in Desktop Deluxe. But the 1099NEC section might not be ready yet. You might need to fill it out using the Forms Mode.
Federal Taxes Tab
Wages & Income
Choose Jump to Full List -or I'll choose what I work on
Then under 1099Misc and Other Common Income
Income from form 1099-MISC
What does the "ER" mean in the 50% ER portion you mention?
ER means employer
EE means employee
You are paying 15.3% self employment tax for……
SS for employer 6.2%
SS for employee 6.2%
Medicare for employer 1.45%
Medicare for employee 1.45%
I don't see that TurboTax asks me about my 1099-NEC income. It only asks about 1099-MISC.
I'm using Home and Business, 2020.
Where is the section to enter my 1099-NEC income?
Ah, yes, there it is.....in Forms Mode. Thank you.
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