work for your selfers.. i got a question
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work for your selfers.. i got a question
Hey so I do web design on the side.. and I made someone a site for about $1400 (something that would have cost the guy about $3500 from other designers)
I didn't expect to get get 1099'd for this because it is for a friends dad and I hooked him up with free updates whenever he needs them... but i guess new companies need to write off what they can.
What can I expect to get taxed for this? If this is the only "additional" income that is reported for me?
Also, I don't have a business name, entity at all.. its just under me.. so can I make him an invoice with my name as the company name?
thanks for the help guys.
I didn't expect to get get 1099'd for this because it is for a friends dad and I hooked him up with free updates whenever he needs them... but i guess new companies need to write off what they can.
What can I expect to get taxed for this? If this is the only "additional" income that is reported for me?
Also, I don't have a business name, entity at all.. its just under me.. so can I make him an invoice with my name as the company name?
thanks for the help guys.
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That's a good question. So you don't have a registered business, but you provide a service for a fee. I suck at taxes but I think there might be a section on your tax form for additional income. I'm not sure what the tax rate on that is though.
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probably 43%. thats what you get nailed on with tips. that is also a thing you have to put in additional income. you should have told the guy to stay under the table with the website or only claim 700 of it if he wanted to write it off. Usually if you are self employed or have means of additional income, rule of thumb is save 43% of what you make. That is what i was told. it may not be right. i have done my own taxes for years, gone with that and never had a problem. and i know i never over paid.
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It really depends on the rest of your income for the period. If you're showing a good amount of income, then I wouldn't be surprised if you had to pay about 30-40%.
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Depends on how close you are to the next tax bracket and your total reported income for the year.
I'd expect to have to pay probably $400.
I got 1099'd and didn't know. Tax man caught up to me 2 or 3 years later. I just finished paying it off. DEFINITELY report it.
Most likely it'll just roll into what you'd be getting back. So you'll get less back but still be alright.
Unless of course you have other 1099s you didn't pay on.
I'd expect to have to pay probably $400.
I got 1099'd and didn't know. Tax man caught up to me 2 or 3 years later. I just finished paying it off. DEFINITELY report it.
Most likely it'll just roll into what you'd be getting back. So you'll get less back but still be alright.
Unless of course you have other 1099s you didn't pay on.
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I don't know if hes actually going to "1099" it. But I know he is going to claim it as a write off.
I don't wanna hide it from the IRS haha, I don't want uncle sam knocking at my door.
I don't wanna hide it from the IRS haha, I don't want uncle sam knocking at my door.
It's just additional income. It's not like a bonus or something that gets taxed at a higher rate. So just add the $1400 to your regular annual income and refer to this chart to see what tax bracket you fall in.
http://www.irs.gov/formspubs/article...164272,00.html
By the way, you are correct, the company name will just be your name and it's tax id will be your ssn.
I got stuck in a similar situation in 2006 for some side work that I did. It does suck.
http://www.irs.gov/formspubs/article...164272,00.html
By the way, you are correct, the company name will just be your name and it's tax id will be your ssn.
I got stuck in a similar situation in 2006 for some side work that I did. It does suck.
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When I was doing Real Estate loans it was always told to me to save 40-50% of your gross pay. Being taxed for self employment is way higher than any other tax bracket BUT with such a small amount, you dont have to worry to much.
It gets claimed as ordinary income in your situation and thats that...see a CPA obvisouly and don't sweat it.
FYI- anything over $600 for independent work/self employment type work you can be 1099, and as a business (which you are acting as one) you should expect it. In the future make sure you know what someone plans to do...especially b/c now your BRO HOOKUP price of $1,400 for something that was suppose to be $3,500 might have just costed you hundreds in taxes.
my $0.02
-Noah
It gets claimed as ordinary income in your situation and thats that...see a CPA obvisouly and don't sweat it.
FYI- anything over $600 for independent work/self employment type work you can be 1099, and as a business (which you are acting as one) you should expect it. In the future make sure you know what someone plans to do...especially b/c now your BRO HOOKUP price of $1,400 for something that was suppose to be $3,500 might have just costed you hundreds in taxes.
my $0.02
-Noah
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According to the "booklet" that came with my IRS packet for my 2007 taxes, 1099-Misc income should NOT be reported on the "Other Income" line. It should be reported on a Schedule C or C-EZ and the net profit or loss should then be recorded under "Business Income" on the 1040 or 1040-A.
I paid 15% tax on my taxable income (line 43 on the 1040) and adding $1400 to my taxable income would have added $350 to my annual taxes.
Noah is correct that $600 is the point at which a company is legally required to 1099 any Independent Contractor, but the company needs to have your full legal name, address and SS # in order to send a 1099 to you and the IRS.
I'm a bookkeeper and make a point of never paying a vendor until we have all this information. However I have worked at companies where the previous bookkeeper was not as diligent and therefore we were unable to 1099 some people because we did not have sufficient information.
I also have my own side business, which has made doing my taxes a little more "interesting"!
Feel free to pm me if you have more questions.
Jane
I paid 15% tax on my taxable income (line 43 on the 1040) and adding $1400 to my taxable income would have added $350 to my annual taxes.
Noah is correct that $600 is the point at which a company is legally required to 1099 any Independent Contractor, but the company needs to have your full legal name, address and SS # in order to send a 1099 to you and the IRS.
I'm a bookkeeper and make a point of never paying a vendor until we have all this information. However I have worked at companies where the previous bookkeeper was not as diligent and therefore we were unable to 1099 some people because we did not have sufficient information.
I also have my own side business, which has made doing my taxes a little more "interesting"!
Feel free to pm me if you have more questions.
Jane
Last edited by RallyWagon; Apr 26, 2008 at 12:05 PM.