In previous years I have always had a regular job, and then on the side done random DJ stuff that was too few and far between to worry about on my taxes. so I’ve always just gotten a regular employee’s tax return and gotten it done and always had extra taxes taken out so that I would always get a nice big return.

However, This year I have worked for place A making 0/week. The owner of the business told me early on that he never sends his DJ a 1099 because it is just an enetertainment expense to him and his accountant. He pays me with a regular check weekly. I was dating a girl at the beginning of the year who is an accountant. She said that I shouldn’t worry about it since its such a small amount of money and just not file this year, but next year I would keep track of my iincome and expenses, and file as an independent contractor.

Now that I am almost to the end of the year I just got place B in addition to that gig and it pays me 0/week, the owner asked me for my info and I told him that I just take a regualar check for my services and he refused and says that he is audited all the time so he has to either put me on payroll or 1099 me. So I Chose payroll since that means he’d remove taxes and it would be fine. I knew though, that it was going to look stupid to turn in a tax return on like 0 for a year. But whatever, anyway… He ignored it and just sent me a check with no taxes taken out. So I am assuming that if I cash this he is going to 1099 me.

So here are the questions I have.

1. Is there a minimum amount that you can make as an independent contractor and not even have to file? Or do I really have to file a 1099 for this? By the time I do taxes I doubt I’ll have even earned 0 from this guy.

2.If I do indeed have to file on it or even if I didnt have to I just chose to file it anyway for just the hypothetical 0 year… would they question how I survived on 0 all year?

3. Is there a minimum amount of money the IRS would bother auditing?

4. If they did audit me or whatever on the small amount of income I’ve had this year, and figured that I owe lets say 00 to them, I have bought equipment and repaired things and have had a lot of expenses this year that I don’t still have every reciept for, but are honest things that would be deductions from my taxable income. So do I have to have and file my receipts for EVERY expense I had? Or can I ballpark estimate them conservatively and have that work?

I have NO problem with paying taxes where they are due, I have all my life. But since the girl i trusted advised me not to worry about it this year I haven’t set aside the money I normally would have for taxes, nor have I kept any of my receipts on file.

I want to be legal and in full compliance, but I also don’t want to lose my butt here. So I am looking for advice on how to do the best thing FOR ME in this situation with the least amount of possible consequences.

Thanks for your help!
Whoa, people calling me a liar is not cool. I admit I’m not the most financially knowledgable person on earth… but a liar I am not. If you re-read, it says in past years I have had such few gigs that they weren’t worth filing. This year my only job has been doing this and its my first time ever having any of these problems. I’ve never been an IC before and pardon me for not knowing better. I HAVE always paid all my taxes. Don’t be mean I’m not trying to be scandalous, I am trying to be correct here. sheesh! If I was going to try to be scandalous I could just quit my 2nd gig and hope to not get caught. THAT IS NOT MY INTENTION. Thanks for answering my questions but now what? Ok, so I am WAY over the 0 mark… should I just request my employer’s accountant 1099 me? Then find whatever reciepts I can? Then just pay whatever the IRS says I owe? Can I just call in and request to be audited? Now that I know what to do for next year somewhat I will be much better off, but what now?

Hi, I am an independent contractor and received a 1099-misc from my employer. I have turbotax home & business 07, and I think I enter the 1099-misc under personal income but I want to make sure because for the 06 turbotax home & business, there wasn’t a 1099-misc for personal but business only.

One last thing, turbotax is great, but I want to maximize my deductions and was wondering it is worth the money to let a tax expert review/do my taxes. All I have is a 1099-misc and 1099-int. I’ve made less than 30k that year and after taking off the deductions I owe about 6k. I want to try to make this around 4~5k if possible. Does anyone have any recommendations and will know about how much it’ll cost? Thanks!

In August my fiancee and I started working for an employer that pays us with a business account check but doesn’t take out any taxes. We know come tax season things are going to get confusing so we’re trying to get some things cleared up now.

I’m assuming the best way to file would be as an independent contractor since we work from home and because of the way he pays us.

My real question is what counts as deductions. We work from home but we both have offices that we could go to if we needed to. I’m at home about 99% of the time working and my fiancee about 80% of the time. Can we count a portion of our home as a deduction? And is this only if you own not if you rent?

Also we both use internet 100% of the time we are home on the job. We would have internet even if we weren’t working from home and when we’re not working we use it for personal use. Could we count a percentage of the internet as a deduction.

The same goes with cell phones. We both have PDA’s that we use to communicate with our boss and other business associates we must talk with. But we also have them for personal use. Percentage?

We also obviously use our own personal computers but they were purchased a few years ago and are used for personal use as well. Could we count a percentage of the depreciated value of them as a deduction.

I need to buy a new computer for personal and business use but I haven’t yet… Would it count?

My fiancee uses our car for business trips and is reimbursed by our employer for gas and mileage. The car is also used for personal use.

I know this is a lot of questions but we’re both clueless as to what we need to do. We’re probably going to pay someone to do our taxes at least this year. I’m quite worried about all this since I’ve heard that as an independent contractor you must pay back about 15% of your net pay… That’s… a lot.

Anyway, any help with this would be appreciated. I’m browsing trying to find some information on my own but I’m not really used to how they word things so I end up getting confused and frustrated.

Thanks in advance.

I work as an independent contractor doing computer tech support. I’ve never been paid before as a contractor so i’m not too sure about the whole tax thing. My main question is this. A few months back I got a federal tax ID for a business I wanted to start. Well would it be more financially benifical to me to have my employer pay me directly as an independent contractor or should he pay me under my company name and federal tax ID number?
Which one would give me more deductions?
Also what percentage would I want to deduct to cover taxes if I was in the K-K and K-K a yr pay range, being single, no assets, no property, 1 child not claiming as a dependent.

My employer has recommended that I form an LLC and be paid as an independent contractor via 1099. I am married, we filed jointly last year. We are located in IL. I work out of my home office, use my vehicle for business travel sometimes and entertain clients from time to time with dinners, etc. I only have healthcare with my employer and no other benefits and I am told they would continue to provide the healthcare. I invest in my own IRA with no employer benefits. I am trying to figure out if I will actually pay less taxes via more deductions (currently not deducting anything but the standard). I am also in graduate school part time on student loans with no employer assistance.
So theoretically, if I was previously salary of 75k I should ask for an increase to cover the extra self employment tax i will incur?

the line of work is construction / real estate development consulting.
I appreciate all of your input! It is all very helpful. Thank you.
Can anyone explain how this would change if I formed a Corporation instead?

I’m looking for some info on filing income from being an independent contractor. I worked 6 months in 2008 doing contract work (graphic design). I gave the company invoices and was paid monthly with no taxes or other deductions taken off. I’ve been putting aside a certain amount from each cheque based on an income tax calculator.

Now that it’s almost tax time, I’m not sure how to file this income – I usually use Quicktax or another software to do it myself. Do I claim it as small business income (T2125)? I read that if you make under 30k (my amount is roughly 20k) from small business, you don’t need a GST number – I don’t have a GST number so I am hoping this is correct.

I may end up getting an accountant to do my taxes for me, but if it itsn’t too complicated I’d like to do it myself as I like to learn about these things and do it on my own.

I recently left my job to work for a different company. I signed an agreement with that new company to work as an independent contractor. They are reimbursing me for all my business expenses. This is my first time through paying (estimated) tax as an independent contractor.

I’ve been wading through IRS forms and instructions and a whole lot of jargon and have learned a lot about sole proprietorships, paying self-employment tax, etc. but don’t yet have a good understanding of what portions of what forms (e.g., 1040, Schedule A, Schedule C) I need to fill out to explain the money I’m receiving that reimburses my business expenses and what deductions I’m able to claim for these reimbursed business expenses (again, which portions of which forms).

Thanks in advance!
Ok, so on Schedule C, gross receipts are my fees plus reimbursed expenses, but then I subtract those expenses to report income on 1040.

What about deductions: do I report any reimbursed business expenses on Schedule A?

For the last two years I had incorporated myself and was working as independent contractor, getting 1099 in my company’s name. Next year I will be working for w-2 (is this good or bad).
If I do not disolve my corporation, can I pay its overhead from my w-2 income and deduct it as business loss? If I do so, will hundred percent of my business loss allowed as my deduction to lower my taxable income?
I have a S-Corp. I am not trying to evade taxes just trying to determine if it is best to disolve the corporation or if I could have the insurance on the corporation paid and have the expense for the referral deducted as individual loss.

I’ve been filling out the tax forms, and I worked as an independent contractor last year AND had a different job using a W2. I’ve figured out the taxes for the W2 job, and I think I’ve completed the taxes for the independent contractor job (using 1099-MISC and Schedule C). I’m just wondering it there are any deductions that can be applied to the self-employment tax. I’ve already made my deductions on business related expenses (car expenses, supplies, unpaid debt owed to me), but I was wondering if there’s anything else. I am eligible for the Lifetime Learning Credit, but from what I understand, that’s only deductible for the W-2 job.

Is there a way to claim dependents or exemptions from self-employment tax? I have two exemptions. If not, why is it that self-employment tax doesn’t use exemptions?

I know it’s a lot of questions…just trying to figure things out. Thanks!
The instructions provided by the IRS says to deduct any unpaid debts owed to you. Once they are paid, you add it to your income in the year they are paid IF paid.

I received a w-2 form from my previous employer. The employer withheld only state (CA) taxes from my paycheck every pay period. They DID NOT withheld any federal, social security, or medicare taxes. So at the end of the year when i file my taxes, I have to pay those taxes. I had always assumed i was an independent contractor, and as such i was entitled to deduct business expenses on my schedule C. Normally i would be issued a 1099 misc form instead of a w-2, but in this case i think because my employer witheld state taxes, they issued me the w-2 form. Well, the irs informs me that because my employer did not classify me as a "statutory employee" in the w-2 form, I would NOT be able to deduct any business expenses. They told me i would have to get a letter from my employer stating that i was a "statutory employee"
then they will allow the business deductions. I called my employer, and they said i was not a statutory employee under section 530 (??). ..
any help is appreciated.