1099 - nec

[SweetieJean]

OP asked if he/she had to file a return, and the response was "yes" if they have certain credits.  More generally, those of us who have regularly answered questions here have been encouraged, for many years, to think ahead and offer our insights.  See:

TurboTax Community Guidelines: Do's and Don'ts (intuit.com)

[VolvoGirl · Accepted solution]

@Nezihe1   If you are talking about 2022 the year is not over yet.  You may have more income W2, 1099NEC or cash or another reason to file a return.  Here's some general info.

For Freelance.....

 If you got Cash.  You don't need to get a 1099NEC or 1099Misc or 1099K.  Even if you did you can enter all your income as Cash.  Only the total goes to schedule C.

You will need to keep good records.  You may get a 1099NEC 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 and if you don't get the 1099NEC.

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 or 1099NEC 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.  

The SE tax is already included in your tax due or reduced 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.

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

[Nezihe1]

Thank you so much 🙏🙏

[Nezihe1]

I have a new question for you, for the year of 2022 I made 2738$  ( also only income) as self employed person and I reside in state of  Georgia, for that amount do I have to make estimated tax payments to state of Georgia? 

[rjs]

@Nezihe1 Your question about estimated tax was answered in your previous post of the same question two days ago. Please post your question only once.

If you have further questions about your self-employment in 2022 please add them to the thread that you started on January 7, to keep all the related discussion in one place.

[Nezihe1]

Yes thank you it was answered as it was not enough to make estimated tax payments to state of Georgia, but a few hours ago in another platform someone answered me as if I made at least 1000$ for the year in GA state I have to make estimated tax payments, which got me totally confused and I just wanted to ask one more time to make sure for the answer 

[CatinaT1 · Accepted solution]

If this is for 2022 income, you have missed the dates for making estimated payments. Those installments were due April 15, June 15, September 15, and January 15 (of this year). When you file your tax return for 2022, you will pay any tax due. 

According to the Georgia Department of Revenue -

Estimated Tax Estimated tax is required for each individual subject to Georgia income tax who reasonably expects to have gross income during the year which exceeds (1) personal exemption, plus (2) credits for dependents, plus (3) estimated deductions, plus (4) $1,000 of income not subject to withholding. 

Estimated tax required from persons not regarded as farmers or fishermen shall be filed on or before April 15 of the taxable year, except if the above requirements are first met on or after April 1 and before June 1, estimated tax must be filed by June 15; on or after June 1 but before September 1, by September 15; and on or after September 1, by January 15 of the following year. Individuals filing on a fiscal year basis ending after December 31 must file on corresponding dates.

You can find the filing requirements and exemption amounts here.

[Nezihe1]

Thank you so much for explaining to me as English is my second language and I needed to understand it better with your answer, I appreciate it so much thank you, as I understand that while I m filing my federal and state taxes since I missed making estimated payments ( if I owe any) I just have to pay what's due all in once correct? I should be fine with that 

[CatinaT1]

That is correct, you will pay what's due all at once.

[Nezihe1]

You have been great help thank you so much