Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
tishdixon
New Member

Filing self employed returns

I became self employed this year with two separate small businesses. I have a mortgage and regular type bills. Is it more beneficial to use an actual tax agent to complete my returns since they are complex between expenses, bills etc. being head of household and single or do them myself with a turbotax disc? Will I receive more back (my income overall has been quite low so I had to dip into savings to live) if an agent does them? How much would an agent charge to do this verses doing it myself from a retail purchase of program?
1 Best answer

Accepted Solutions
VolvoGirl
Level 15

Filing self employed returns

You can try doing it yourself using the Online version when it opens in December.  You don't pay until you file or want to print.  So you can try it out.  If it gets too complicated you can just leave and go somewhere else.

Some general info.  You will need to keep good records.  You may get a 1099Misc at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small.  You might want to use Quicken or QuickBooks to keep tract of your income and expenses.  

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....
http://quickbooks.intuit.com/self-employed

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.

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

PAYING ESTIMATES
The first year you don't need to pay estimates as long as you pay in (by withholding) as much as your tax was last year.  But if you will have a big income you should send in estimates so you don't owe too much next April on your tax return.

You must make quarterly estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
 
- 2. You expect your withholding and credits to be less than the smaller of:
    90% of the tax to be shown on your current year’s tax return, or
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

To prepare estimates for next year you start with your current return, but be careful not to change anything.  For Online versions, if you can't get back into your return, Try this, you can sign back onto your account, click the Visit My Tax Timeline and then under SOME THINGS YOU CAN DO, click on Add a State.  This should get you back into your return.

You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

Or Go to….
Federal Taxes or Personal (H&B/Self Employed version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

The 1040ES quarterly estimates are due April 18, 2017, June 15, Sept 15 and Jan 16, 2018.  Your state will also have their own estimate forms.

To just estimate the remaining quarters put in that you paid $1 for the quarters you missed so it will only calculate the remaining quarters.

Or you can pay directly on the IRS website https://www.irs.gov/payments
Be sure to pick the right kind of payment and year.....2017 Estimate

View solution in original post

4 Replies
SweetieJean
Level 15

Filing self employed returns

The end result should be the same, regardless of who does the return. You have to ask around your local area to see how much a tax preparer charges there.
tishdixon
New Member

Filing self employed returns

Thank you very much. I will
VolvoGirl
Level 15

Filing self employed returns

You can try doing it yourself using the Online version when it opens in December.  You don't pay until you file or want to print.  So you can try it out.  If it gets too complicated you can just leave and go somewhere else.

Some general info.  You will need to keep good records.  You may get a 1099Misc at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small.  You might want to use Quicken or QuickBooks to keep tract of your income and expenses.  

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....
http://quickbooks.intuit.com/self-employed

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.

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

PAYING ESTIMATES
The first year you don't need to pay estimates as long as you pay in (by withholding) as much as your tax was last year.  But if you will have a big income you should send in estimates so you don't owe too much next April on your tax return.

You must make quarterly estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
 
- 2. You expect your withholding and credits to be less than the smaller of:
    90% of the tax to be shown on your current year’s tax return, or
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

To prepare estimates for next year you start with your current return, but be careful not to change anything.  For Online versions, if you can't get back into your return, Try this, you can sign back onto your account, click the Visit My Tax Timeline and then under SOME THINGS YOU CAN DO, click on Add a State.  This should get you back into your return.

You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

Or Go to….
Federal Taxes or Personal (H&B/Self Employed version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

The 1040ES quarterly estimates are due April 18, 2017, June 15, Sept 15 and Jan 16, 2018.  Your state will also have their own estimate forms.

To just estimate the remaining quarters put in that you paid $1 for the quarters you missed so it will only calculate the remaining quarters.

Or you can pay directly on the IRS website https://www.irs.gov/payments
Be sure to pick the right kind of payment and year.....2017 Estimate

View solution in original post

tishdixon
New Member

Filing self employed returns

Thank you for your help. Very informative. Thank you so much!
Dynamic AdsDynamic Ads
Privacy Settings
v