1099 Tax Planning
I am taking a 1099 job. Is there a document that outlines what Quicken can do with tax planner for 1099 jobs including what deductions I can take? My wife will have a W2 and I will be 1099.
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Here is some info I post over in the Turbo Tax forum.
When you get paid with a 1099NEC or no form you are a self employed independent contractor. You will file a Schedule C in your personal 1040 return.
Some general info on self employment on Schedule C.......
You will need to keep good records. You may get a 1099NEC or 1099K at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small.
When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.
Here is some IRS reading material……
IRS information on Self Employment
Publication 334, Tax Guide for Small Business
Publication 535 Business Expenses
You pay Self Employment tax on $400 or more of net profit from self-employment in addition to any regular income tax. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire.
I'm staying on Quicken 2013 Premier for Windows.
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To track your income and expenses in Quicken. This is how I do it. I don't have the Home & Business version (I have Premier) and don't know about planning and budgets in Quicken.
For an income or expense category to show up under Business you have to assign it a Schedule C tax line number. Go into Edit Category and assign it one. If you need to see a schedule C, here's the blank form….
You can either assign the tax line number to an existing category or you might want to set up a new category for it to keep the existing one under personal if you have the same expense for both personal and business.
To check the tax line assignment open the Category list by either clicking on the Category Icon or go to Tools-Category List or Ctrl+Shift+C. Then select the category and right click on it to Edit it. Click on the Tax Reporting Tab and check the box for Tax related and pick a Schedule C: tax line item.
You should set up business categories. Make sure to assign them to a schedule C line item number so they show up as business categories. I don't know what categories you would need but my husband is a Land Surveyor. Here's how I set mine up (I also put the Schedule C line number in as part of the name)...
Survey Income
Survey Expenses
……..11 Labor
……..18 Office Expense
……..20 Equip Rent
……..22 Supplies
……..24a Travel
……..27 Other - Printing
……..27 Other - Small ToolsI made the expenses sub-categories of the main Survey Expense category.
Also I use Tags for each job. Then when I run a report I can sort it by job. So an expense entry might look like this…
Survey Expenses:22 Supplies/Maple StreetI'm staying on Quicken 2013 Premier for Windows.
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Oh, since you get a 1099 you won't have any tax withholding taken out so you need to send in quarterly estimated payments.
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.
You must make quarterly estimated tax payments for the current tax year if both of the following apply:
- You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
- You expect your withholding and credits to be less than the smaller of:
90% of the tax to be shown on your current year’s tax return, or
100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)
Here are the blank Estimates and instructions…..
Or you can pay on the IRS website. Be sure to pick 2023 1040ES payment
If you use Turbo Tax I can post more info.
I'm staying on Quicken 2013 Premier for Windows.
2 - You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
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@volvogirl I do use Turbotax. I'd appreciate your help with TT too. Thanks for the help!
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Hmmm, thought I posted some Turbo Tax info. Oh well, here you go. And you should use the Turbo Tax forum.
In Turbo Tax……To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You will need to use the Online Premium or Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.
There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed return....
To prepare estimates for next year you start with your current return, (if you can't get back into your online return try this, On the Tax Timeline page you have to select Add A State to get back into your return). But be careful not to change anything on your real return.
Go to Federal Taxes or Personal (Home&Business version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update buttonSay No to W4. When you get to the W4 and Estimated Taxes section, say you want to adjust your income to go though all the screens.
TIP - If you didn't owe or missed making the prior quarterly estimated payments and need to just calculate starting now, you can go though the Estimated Taxes section and just put $1 (one dollar) in for the quarters you missed. Then it will only figure the current and remaining quarters.
The 1040ES quarterly estimates are due April 18, June 15, Sept 15 and Jan 16, 2024. Your state will also have their own estimate forms.
How to make the Estimated payments
I'm staying on Quicken 2013 Premier for Windows.
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@volvogirl Thanks!
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