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Question

MY HUSBAND HAS DONE SOME CONSULTATION FOR HIS PREVIOUS EMPLOYER
AND IS PAID PER DAY.   HE IS RETIRED AND IS RECEIVING SOCIAL SECURITY, ETC.
MY QUESTION IS WILL HE HAVE TO PAY SOCIAL SECURITY TAXES ON THIS MONEY??
THE AMOUNT THRU JULY IS UNDER 4000.00! I KNOW WE WILL PAY FEDERAL TAXES.
IF HE NEEDS TO PAY SOCIAL SECURITY, HOW DO WE FIGURE THE AMOUNT????
THIS IS A FIRST FOR US!

THANKS, XXXXXXXXX XXXXXX

Submitted: 101 days and 10 hours ago.
Category: Tax
Value: $15
Status: CLOSED
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Posted by LEV 101 days and 10 hours ago.

Answer

If your husband is hired as an employee - and his compensation will be reported on the form W-2 - his employer most likely already took out social security and Medicare taxes and there is nothing your husband need to do on the tax return.

 

If however - your husband is paid as a self-employed contractor and his compensation will be reported on the form 1099-misc - it will be a subject of self-employment tax.

In this case he will file schedule C - http://www.irs.gov/pub/irs-pdf/f1040sc.pdf - for that income and will be able to deduct related business expenses.

Net business income is a subject of income tax and self-employment tax.

Self-employment tax 15.3% are due if his net business income is above $400 and should be calculated on the schedule SE - http://www.irs.gov/pub/irs-pdf/f1040sse.pdf

 

Let me know if you need any help with reporting.

 

101 days and 10 hours ago.

Reply

HE IS ACTING AS A CONTRACTOR, THE SCHEDULE C WILL BE DONE WHEN WE FILE OUR TAXES
FOR 2009.   I FILE THRU TURBO-TAX DELUXE, SO WILL I BE ABLE TO HANDLE THIS WITH
TURBO-TAX????

Accepted Answer

Yes - that situation would be perfectly handled in any tax software including Turbotax.

The key issue is to keep a good record of business related expenses - so you would be able to take deductions on the schedule C.

 

For instance - the cost of TurboTax filing should be prorated to business and personal - and the business could be deducted on the schedule C.

Self-employment tax 15.3% will be calculated on the schedule SE.

If you need any help with reporting - let me know.

 

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Expert: LEV
Pos. Feedback: 99.3 %
Accepts: 
Answered: 8/12/2009

Tax Preparer

Taxes, Immigration, Labor Relations

101 days and 9 hours ago.

Reply

THANKS SO MUCH!!!!

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