1099nec

4 replies
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I already purchased the TurboTax premier, I received 1099nec because I was a contractor or freelancer. if I don't have any expenses for self-employed. should I upgrade to turboxtax self-employed?

VolvoGirlAnswer

Level 15

You pay Self Employment tax (Scheduled SE) on a Net Profit of $400 or more on Schedule C. 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.

The SE tax will be included in your tax due or reduce your refund. It is on the 1040 Schedule 2 line 4 which goes to 1040 line 23. The SE tax is in addition to your regular income tax on the net profit. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 15 which flows to 1040 line 10.

MayaD

Alumni - Intuit

You don't need to upgrade to TurboTax Self Employment if you are not claiming any Self Employment Expenses.

Please check the link below for any business expense that might be available for you and can reduce your taxable income.

What can I write off as a business expense?

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wxmAuthor

Level 2

but why my federal tax is so high for the 1099nec? it is around 25%. I just have a w2 and 1099nec, it was 400 tex return but owing 2000 after entering the 1099nec income. after selecting none of these apply to me in the "does one of these uncommon situations apply?"

AliciaP1

Alumni - Intuit

Contractors or freelancers are considered self-employed for tax purposes. The net income from this work is subject to self-employment taxes of an additional 15.3%.

See the link provided by @MayaD to check for any expenses you could claim to reduce your tax liability.

For more information about self-employment taxes see What is the self-employment tax?

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