Accepted Answer

Hello again bournb,

If your earnings were reported to you on a 1099 form, that means you are being treated for tax purposes as an independent contractor, which basically means that by the IRS you are considered to be self employed.

As a self employed person, you must report all of your earnings on Schedule C. On that same schedule C, you may deduct any expenses you had in connection with your self employment, such as mileage, or office supplies, etc. You will then pay income tax on your net earnings. You will also need to fill out Schedule SE to pay social security and medicare taxes, because as a self employed person these taxes are not withheld from your check as they are when you are a regular employee.

If your total income for the year was less than $8,950, then you will not actually end up owing any income tax on your earnings, but you would still need to file a return and pay the social security and medicare taxes that are figured on Schedule SE.

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Thank you.

Expert:	Merlo
Pos. Feedback:	99.9 %
Accepts:	7663
Answered:	2/19/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad