Today TaxMama hears from Alex in the TaxQuips Forum, with this issue. “I am the worship leader at my church and am currently paid a salary of $6,000 a year without taxes taken out. I also just recently took on a short term job in which I was hired as an independent contractor to do odd jobs for a small business. By the time my services are finished I will have made over $600. My questions are: What form(s) do I need to get filled out? What taxes will I have to pay in light of this information to make sure I get everything taken care of?”
I did a little reading to learn more about worship leaders to see if you might be entitled to any special treatment as clergy. Apparently not. But it does sound like a delightful and joyous occupation.
Well, it sounds to me as if you’re in business for yourself. You will need to fill out a Form 1040, a Schedule C, a Schedule SE – at the very least. Those forms are – the main long form tax return, the business profit and loss, and the self-employment taxes forms. You may also need a Schedule A (for itemized deductions); a Form 4562 for depreciation; and a Form 8829 (for office in home).
Read IRS Publication 334 BEFORE you do anything. You can find it online or call IRS’s Forms hotline at 800-TAX-FORM (800-829-3676) to get a printed copy.
Also, consider learning about strategies to reduce your taxes with Small Business Taxes Made Easy.
It appears that more and more good things are coming your way.
And remember, you can find answers to all kinds of questions about being self-employed, and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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