If you have net self employment income of $400 or more you have to file
a schedule C in your personal 1040 return for self employment business income.
You may get a 1099-Misc for some of your income but you need to report
all your income. So you need to keep your own good records.
>>>Where it
asks for 1099-MISC income, you will only report income you received, that
was reported to you on a 1099-MISC has having been paid to you.
>>>Where
it asks for General Income, below that in smaller print it clearly states
"Business income including income reported on Forms 1099-K". What you
enter here will be everything except the income reported to you on 1099-MISC.
>>>Other
Income is income that is not included in either of the first two.
>>>Income
you paid back would be things like refunds which would be included as
income in one of the first two categories.
Here is
some 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
There is also QuickBooks Self Employment bundle you can check out which
includes one Turbo Tax Home & Business return and will help you keep up in
your bookkeeping all year along with calculating the estimated payments needed
....
http://quickbooks.intuit.com/self-employed
Self Employment tax (Scheduled SE) is generated
if a person has $400 or more of net profit from self-employment on Schedule
C. You pay 15.3% for 2014 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.
PAYING ESTIMATES
For SE self employment tax - if you have a net
profit (after expenses) of $400 or more you will pay 15.3% for 2015 SE
Tax on 92.35% of your net profit in addition to your regular income tax on it.
So if you have other income like W2 income your extra business income might put
you into a higher tax bracket.
You must make quarterly estimated tax payments
for the current tax year (or next 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 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 version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start
or Update button
