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3 Answers

How to file taxes as a contract worker with a 1099?

Asked by: epondel 982 views YA Discussion

My husband started a job in October 2012 as a contract worker for a non-profit organization. He is, apparently, supposed to file a 1099 tax form. It appears that this is considered ‘self-employed’ and he would need to make quarterly payments? This is new to us. There have been no taxes withheld in his paychecks and they are based on his work. He receives paycheck on the first and fifteenth of each month. I was assuming that we would file our regular taxes in the spring, but there may be a tax due on January 15th 2013, according to my research. I have a regular job with a W-2. I am wondering if anyone knows how and if he is obligated to pay the self-employment tax and whether we should still file a joint tax return? My taxes are fairly straightforward, as we do not own a house and have no deductions. We filed a joint tax return last year, while we were both W-2 employees.

Should we file our taxes as usual? Should he pay quarterly and we also file our taxes jointly (as a married couple)? Should I just pay taxes as an individual, instead of jointly filing? What are the taxes that he (contract work) would need to pay? Should we just consult a CPA on all of this? Any advice on this would be very much appreciated.

3 Answers

  1. Yirmiyahu on Jan 06, 2013 Reply

    Consult a CPA. Your tax returns are going to become far more complicated.

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  2. kathykoul on Jan 06, 2013 Reply

    It’s probably best if you consult a tax preparer since you’re new to this. This return will have a Schedule C (profit loss from business) and a Schedule SE (self employment tax) attached to it. Self employment tax is medicare and social security taxes not paid through a payroll deduction and is both sides of it – when you are an employee you pay half and your employer matches it. SE tax is based on the net profit – Schedule C is used to list the income and any deductions to calculate the net. The income is also subject to income tax. He should be submitting estimated quarterly payments using form 1040ES. If you re post this question in the United States category instead of Other you’ll get more responses from the regulars many of which are professional tax preparers.

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  3. Cathi K on Jan 06, 2013 Reply

    The same way we tell the 10 people every hour that is asking this. Geesh no one even looks. You file a schedule C and SE. Subtract out expenses. It goes to the 1040 and is added to the rest of your income. No need to file separately. You do quarterly taxes if you think you will owe 1k or more at tax time. You should go and sit with a tax pro to get you on the right track.

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