My wife started working as a contract worker in 2018 and her employer wants to send her 1099 via the Payable app. How does this impact my tax filing process?

[VolvoGirl · Accepted solution]

And it depends what version you are using.

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 will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

For the future, 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

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 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 Schedule 1 line 27.  The SE tax is already included in your tax due or reduced your refund.  It is on the Schedule 4 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

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.  How to enter self employment income
https://ttlc.intuit.com/replies/4801198

[VolvoGirl]

By the way,  she doesn’t have an employer.  She is not an employee.  When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

[MichaelL1]

Thank you VolvoGirl for the additional clarification to the question asked.  

[MichaelL1]

If she is a contact working getting a 1099, she will report her income and expenses on a Sch C for tax reporting.

She will be able to take deductions against the income she earned for the work.

You will need to use the TurboTax Self-employed edition to do this.

https://ttlc.intuit.com/replies/3302122

[adrien_litton]

This response is not helpful.  The question was in reference to 1099's generated through the Payable app, not Schedule C completion.

[MichaelL1]

Sorry about that. You are at a Tax preparation site I assumed you were asking about preparing your taxes
"How does this impact my tax filing process?"  It does not matter how you get the 1099 via the app or other method, it is still entered same way in TurboTax.

[adrien_litton]

Still not helpful, but certainly condescending. Do you think I'm not aware that I'm on a tax preparation site? There are many ways to enter tax information into TurboTax. I can type everything in manually. I can let TurboTax upload it from prior taxes. TurboTax can even grab my W2 from the ether when I enter my employer's tax ID. The answer to this question is very simple; it could be that TurboTax has no facility to automatically update the information from the Payable app so I'll still have enter it manually, or it could be that TurboTax has the ability to interface with a number of tax form apps and can grab the information directly. It could also be that there are predatory apps out there that disguise themselves as facilitators only to be used later for identity theft, and the TurboTax team might just have some insight into who those are.  Honestly, I was just trying to do my due diligence before having my wife connect to an app that contains her personally identifiable information and for this I am greeted with irrelevance followed by condescension. If you don't know the answer to the question, that's fine. Insulting me is the opposite of help. It begs the question, does a TurboTax TaxPro actually work for TurboTax?  If so, it make me really question whether I want to continue using a product I've relied on for over 15 years.

[MichaelL1]

Sorry for the misinformation as I in no way intended to be condescending to you.  

I just did not understand what you were asking, so thank you for the additional information.
 
To answer your question the 1099Misc must be manually typed in the program to compute your taxes.  There is not the same way to transfer data in the W-2 reporting has.  I hope this clears this up, and thank you for your loyalty to TurboTax.