1099 MISC, what to do, please help

- C
- Cool Guy
  
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posted
19 years ago

Sat, Mar 12, 2005 3:17 PM

I was a working as a contractor for an employer A working for Company B whereas company A got this contract from B and A asked me to start working with $x/hour for limited time in the manner of contract work. I don't own any company. I was getting paycheck from company A. A didn't withdraw any kind of taxes from my paycheck. I worked for 4/5 months during

2004. That employer send me a 1099 MISC with the amount written as "Non Employee Compensation" at the beginning of 2005. The amount is written $16XXX as non employee compensation on Box 7. I was filing my tax return along with other W2 what I have using free Turbo Tax software online. It is asking me "choose the source of non employee compensation income a) self employed Business Income b) farm Income c) Wage Income

My question is which one is appropriate for me? If I pick wage, I pay less tax, if I pick self employed I pay more. I also can't define myself as self employed as I don't own any company or has any employer Identification number or anything. Could you please guide me thru little bit what I should do? If you can shed some light with respect to TurboTax software, it will be a plus as I am using this. Can I make mileage, car, repair cost deductible as I used them during that contract period. If Yes, how??

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- P
- Phil Marti
  
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posted
19 years ago

Mon, Mar 14, 2005 12:34 AM

That's the one

If you're going to continue to do contract work, invest in a session with an accountant, who can advise you on what expenses you can deduct, what records to keep, and estimated tax requirements.

-- Phil Marti Clarksburg, MD

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- Bob Sandler
  
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posted
19 years ago

Mon, Mar 14, 2005 2:48 AM

As a contractor you are self-employed. Even though you don't own a company, you are in business. (You are what's known as a sole proprietor.) You should enter the 1099-MISC in the Business Income section of the TurboTax interview. You do not have to own a company or have an employer ID number.

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- D. Stussy
  
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posted
19 years ago

Thu, Mar 17, 2005 3:59 AM

A. Contractors ARE self-employed. You were treated as a sub-contractor. If you fee this was wrong, see IRS form SS-8 and answer the questions thereon.

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- Cool Guy
  
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posted
19 years ago

Thu, Mar 17, 2005 6:32 AM

Thanks for the response. That contract job was one time 4 months job. I have no plan or time to continue that kind of contract as I am a W2 employee now and thats where I wanna be until I loose this job :) I heard people say if this is an one time thing, you don't have to pay self employment tax. Is this correct? Does it apply to me? I really don't want to hire anybody to do this as I earned only 16000 dollar and that was it. I didn't have a home office dedicated to this, but bought a laptop for this. I have mileage and some office supplies. That was it. Regardless, I am planning to file Schedule C, and SE. To be on the safe side, may be thats what I should do to avoid an audit. Even though, one of my friend told me "Hell no, IRS is not going to come after you for couple thousands dollar, they have big fish to fry ;)".