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Author: tilan398 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120784  
Subject: Self-employment tax Date: 2/13/2002 2:28 PM
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Hi, I was wondering if I could get some help on this one. I've perused some old postings and need some more in-depth advice. Apologies if this is high-maintenance, but I'd like to try to do my taxes myself.

I work full-time as a technical writer, but worked part-time as an editor for some of 2001 and was considered an independent contractor. I haven't received my 1099-MISC from that company yet - despite requesting it from them twice after 1/31. I'd like to do my taxes ASAP or at least estimate what I'll receive or have to pay come April.

I am expecting on being taxed at 15.3% for the self-employment income (which was about $3,000). Am I correct about this rate?

Do I file a sched. C or C-EZ for the self-employment tax?

Can I deduct part of the self-employment tax somewhere (sched A?)as self-employment tax or a business expense to off-set the tax? And can I deduct undocumented expenses as well - work at home, travel, supplies, etc?

What happens if I don't recieve the 1099-MISC from the employer?

And, if you'd be so kind, my girlfriend is in the same boat, but then she went back to school full-time after the company laid her off - can she somehow get out of paying all the self-employment tax since she is a full-time student on a HOPE scholarship?

Thanks so much in advance,

Tim
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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 58928 of 120784
Subject: Re: Self-employment tax Date: 2/13/2002 4:29 PM
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Hi, I was wondering if I could get some help on this one. I've perused some old postings and need some more in-depth advice. Apologies if this is high-maintenance, but I'd like to try to do my taxes myself.

I work full-time as a technical writer, but worked part-time as an editor for some of 2001 and was considered an independent contractor. I haven't received my 1099-MISC from that company yet - despite requesting it from them twice after 1/31. I'd like to do my taxes ASAP or at least estimate what I'll receive or have to pay come April.

I am expecting on being taxed at 15.3% for the self-employment income (which was about $3,000). Am I correct about this rate?


That's correct for the self-employment equivalent to FICA/medicare. You will also pay taxes at your regular rate on the income. Both calculations are on net income (after you deduct any expenses related to the editing).

Do I file a sched. C or C-EZ for the self-employment tax?

You file either Sch. C or C-EZ to calculate your self-employment earnings. Sch. C-EZ is much shorter and easier to complete. Look at both and decide which one you need. After you finish Sch. C/C-EZ, the net income feeds into Sch. SE which calculates the self-employment tax.

Can I deduct part of the self-employment tax somewhere (sched A?)as self-employment tax or a business expense to off-set the tax? And can I deduct undocumented expenses as well - work at home, travel, supplies, etc?

One-half of the SE tax is deducted on the front of Form 1040. (I don't have my forms in front of me, so I can't cite the line #). Your expenses are deducted on Sch C/C-EZ. Undocumented expenses are subject to disallowance if audited. You should have receipts for all expenses.

What happens if I don't recieve the 1099-MISC from the employer?

Legally, you prepare your return with the income you received from the employer. Illegally, you do whatever you want. There's no guarantee however, the the employer didn't send the 1099-MISC to the government and your copy got lost.

And, if you'd be so kind, my girlfriend is in the same boat, but then she went back to school full-time after the company laid her off - can she somehow get out of paying all the self-employment tax since she is a full-time student on a HOPE scholarship?

No such luck. Income is taxable.

Ira

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Author: tilan398 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 58929 of 120784
Subject: Re: Self-employment tax Date: 2/13/2002 4:41 PM
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Ira -

Thanks you very much for your help! It is greatly appreciated.

Tim

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