Independent Contractor?
A good friend of mine owns a Jani-King cleaning franchise and my wife has been employed by him for a couple of years. Starting last year my wife start...
A good friend of mine owns a Jani-King cleaning franchise and my wife has been employed by him for a couple of years. Starting last year my wife started doing it full-time. I have a couple of questions…
1. We have received about ,000.00 in income during 2007 and have not paid any taxes on that income. What kind of percentage of that income can we expect to pay?
2. Her boss provides all of the supplies, however we use one of our personal vehicle to go from job site to job site. I know she drives approximately 250 miles each week. Can we deduct the mileage as business expense as long as we know what the daily amount is (we have kept track).
3. Should I look at any other deductions?
I know there will be people that will say that we need to speak to an accountant, and we intend to. I am just looking for a little education before we meet with one.
Any assistance is greatly appreciated.
I should have clarified the section about my income. I work for an employer (city government) and our total household income was about 53K including the 12K we made as a contractor.
It sounds like your wife will receive a 1099MISC instead of a W2. Her income will be reported on SCH C-EZ . She can take miles between jobs at 48.5 cents per mile( or she may choose actual) This sounds like her only expense. The profit will be carried to line 12 of 1040 and to the Sch SE where the social security equivalent tax at a rate of 15.3% is calcualted. Estimated taxes should have been paid throughout the year. You might have an underpayment penalty if you owe more than $1000 with the return.
If $12,000 is your entire income, your tax will be zero filing a joint return. To pay a tax you have to earn more than about $18,000. If you have other income, however, the $12,000 has to be combined with it to calculate your tax.
Driving to and from work is not deductible, but driving from one job to another is an employee business expense and is deductible. You are wise to keep good records.
I doubt you need to hire an accountant. Unless you have other sources of income, your return, if you even need to file one, would be simple. It is also simple if you just have other wages you earned.