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From: Water Mill, NY Hi TaxMama, My husband and I both work as independent Contractors. We each receive 1099's at the end of the year. What forms do we need to make our allowable deductions for our businesses? Lula Dear Lula, You each need to file your own Schedule C to report all your business income and expenses. If you have assets (like a car, computer, equipment, etc.) you will need Form 4562 to report the depreciation. If you work from home, you may each need to use a Form 8829 to report the office in home expenses. If you have a profit, as you probably will if this is your only source of income, you will need Schedule SE, to compute your Self-Employment taxes (Social Security and Medicare). There may be other things that crop up in the course of preparing your taxes, but these are the primary forms that will affect you. Actually, you might want to get more in-depth information and see about doing bookkeeping and keeping records. Here are some good resources you might want to use. Now, don't be put off by the title - it's one of the most sensible (and cheapest) books I've found: Minding Her Own Business : The Self-Employed Woman's Guide to Taxes and Recordkeeping by Jan Zobel And if you can, you really should start keeping books. The better you track your expenses ... especially the cash expenses, the higher your deductions will be. I have ALL my business clients on QuickBooks (and look! they finally started an affiliate program - meaning they pay me a commission if you use this link) Or, if your mind works better in Excel ... Gail Perry has written a pretty good book that might help. Best wishes Eva Rosenberg Your TaxMama Click Here for TaxMama's Honor System |
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