How do I find the exact amount for filing one of several 1099-misc forms? One of the payers is willing to provide reimbursement for filing earned income from them.

[VolvoGirl]

What are you asking?  Did you get a 1099Misc from them?  Why don't they or you know the amount?  reimbursement for what?  Are you asking about the cost of Turbo Tax?  You can enter 1099Misc or self employment into Deluxe or Premier but if you have any expenses you need to use the Self Employed version.  

[taxesquestions]

I got a 1099Misc from them at the last moment so I had to file it, in addition to a 1099Misc for a different contractor job. I already filed taxes but I think my tax return reflects what I owed for BOTH of those 1099's. Is there a way to figure out how much additional taxes it cost me to file two 1099's instead of one?

[VolvoGirl]

That depends on a lot of other things too.  You pay self employment tax on the Net Profit on schedule C for all your 1099Misc income.  The SE tax is in addition to any regular income tax on all your income.  When you filed your return was the second 1099Misc included?  Or do you need to amend your return to add it?  

[taxesquestions]

The second 1099Misc was included when I filed. 

[VolvoGirl]

Did you have any expenses against the 1099Misc income?  There are a lot of factors but basically......

You pay 15.3% Self Employment SE tax on 92.35% of your Net Profit greater than $400.  The SE tax is in addition to the regular income tax on your Net Profit.

Are they reimbursing you for the Self Employment Tax on it?  That's pretty nice.  But I would think you would have to include that amount as income on next year's return.  

[taxesquestions]

No, I did not have any expenses against the the 1099Misc income. The payer is going to reimburse me, but I'm not sure if that reimbursement should be the SE Tax amount or the "Deduction for one-half of self-employment tax" (aka "Amount 2" below).

Here's the kind of calculations I did earlier:

Section A—Short Schedule SE 

(1099misc income) x 92.35% = "AMOUNT 1"

Self-employment tax 

(AMOUNT 1 from above) x 15.3% = SE Tax

Deduction for one-half of self-employment tax 

(SE Tax) x 50% = "AMOUNT 2"

[VolvoGirl · Accepted solution]

Well the 50% deduction of the SE tax only goes against your regular income tax which we probably aren't considering.  It does not reduce the actual SE tax on Schedule 2 line 4 which goes to 1040 line 15.  I would use the regular full SE tax amount on that 1099Misc.  Unless they (or you) just want them to pay a part of it.

Here is how it breaks out.  You are paying 15.3% for both the employer (you) and employee (also you)
SS for employer 6.2%
SS for employee 6.2%
Medicare for employer 1.45%
Medicare for employee 1.45%

[taxesquestions]

Ok, confirming that I will request the SE tax amount from the payer.

Self-employment tax determined by:

[(1099misc income) x 92.35%] x 15.3% = SE Tax 

THANK YOU so very much, VolvoGirl for the prompt guidance and breakdown!

[Opus 17]

If you are engaged in an ongoing trade or business, and filing a schedule C as a sole proprietor or single member LLC, you are required to keep accurate records and report all your income and expenses, even if you don't get a 1099-MISC from your customers or clients.  The fact that a client issued a last-minute 1099 should not have changed your tax one penny. 

[taxesquestions]

Understood. Thank you!

[VolvoGirl]

Hey just thought of something.  If they want to cover your SE tax they should just put you on their payroll.  That would be the best for you and them.  Then they can expense the payroll taxes on it.  Don't know how they are going to account for it.  If they expense it somehow then you will need to include it in your income.