Unfortunately, the problem will not get any better by waiting, so you should try to file your returns as soon as you can.
When you have both W-2 income and 1099 income, you still only file one return. The income from your W-2 form
is reported directly on line 7 of your Form 1040
. The income from your 1099 form
is reported on Schedule C
. On Schedule C, you also list any deductions
you have in connection with your 1099 income. The net income
then transfers over to your Form 1040 and becomes part of your taxable income
, along with your W-2 income.
If you need assistance in preparing your returns, the IRS offers free assistance to taxpayers in doing this, at any of the local
IRS offices in your area.
Once you get your returns prepared and have a better idea of where you stand, you can work with the IRS to set up an acceptable payment plan to pay off your tax bill. If you are currently out of work, they will take that in to consideration when determining the amount of your payments. Once you return to work you can always then increase your payments to get the debt paid off.
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