Today TaxMama hears from Samar in Texas who asks. “I have worked under 1099. Do I need to pay social security taxes on my wages?”
You betcha! And you’ll be paying MediCare taxes, too!
First of all, let’s get very clear here.
If you receive a 1099-MISC – you do not have wages. You have a business. You are self-employed and the person issuing that 1099 is your customer or your client.
You will report your income on a Schedule C.
And since you have a business, it’s time for you to look at what you do, where you do it, and what tools you use to make it possible for you to do it.
Many of those things may generate tax deductions. They will reduce the income on which you ultimately pay Social Security and Medicare taxes.
We’ll be talking about business expenses, in depth, in our Tax Boot Camp. (Today, in fact.) http://www.suchasuccess.com/who-is-it-for
On the other hand, if you really think you should have been an employee, but weren’t treated as one, you have recourse. There are things you can do. And TaxMama.com is full of information. Just search the site for ‘SS-8’ and you’ll learn exactly what you need to do. http://www.taxmama.com/search.html
Since this is the first time you’re dealing with this kind of a tax return, I urge you to get a professional to do it for you.
Remember, you’ll find answers to questions about business income and all kinds of tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d learn get special tips that aren’t published anywhere else. Please click on the subscribe link and join us.]
- Ask TaxMama :: Where taxes are fun and answers are free
- IRS Schedule C :: Business Profit and Loss
- TaxMama’s Tax Boot Camp :: Who Should Take This Class?
- TaxMama’s Google search :: Search for ‘SS-8″