Self-employment income ranges from small amounts earned from a paper route, to the entire profit margin of a small business.
• Explains IRS Form 1099-MICS
• Links to extensive resources for the self-employed
If you want to avoid costly mistakes, while at the same time taking advantage of all credits and deductions, you'll want to do your taxes with TurboTax this year.
TurboTax helps you work quickly and easily, and it double-checks your return to help you get the largest possible refund. You can even file your state taxes and get your state refund (which may be substantial) much faster than if you mail a paper return.
For those who are self-employed, preparing and filing taxes (should) be a year-round task, since the IRS requires estimated quarterly payments that perform the same function as tax withholding from a "regular" paycheck.
Depending on the source and amount of your income, you should be making these estimated payments regularly. However, for the purpose of this article, we'll assume you haven't done so, and deal with the 1099 form as if you are making your first payment for the last quarter of 2014.
You should receive your 1099-MISC form from whoever paid you in 2014 by the end of January. Almost any income that you received as a non-employee last year can be reported to you and the IRS on a 1099 form, including (but not limited to) income from:
• Work as an independent contractor
• Freelancing gigs
• Certain partnerships
If you are a Sole Proprietor or the only member of a Single-Owner LLC (basically if you're in business for yourself in any form) you are required to make quarterly estimated payments.
Same as an independent contractor receiving a 1099, you are required to make your Social Security, Medicare, and income tax payments in lieu of withholding. However, you may not have any 1099 forms to file along with your return (unless you have customers/clients who issued you such a form).
Doing your taxes online, and e-filing, makes determining the status of your income a snap. It's also the fastest way to get your refund, and you'll avoid costly mistakes. You can e-file with TurboTax where you can get personalized tax help should you need it.
There are many IRS forms and publications related to reporting self-employment and small business taxes. If you received a 1099-MISC form, you cannot file a 1040EZ or 1040A, instead you must file IRS Form 1040 along with Schedule C Profit and Loss From Business for sole proprietors and single-owner LLCs, or the simpler Schedule C-EZ. (See the instructions for Schedule C-EZ to see if you qualify to file the simpler form).
You can also get much more help with your small business taxes from the IRS in the form of detailed publications:
Publication 505 - Withholding and estimated tax.
Publication 334 - Tax guide for small business
Publication 535 - Business expenses (for calculating deductions).
Publication 587 - Business use of your home.
The IRS also has many other resources for small business owners, with videos, tutorials, and more help for those who need it.