Have a Tax Question? Ask a Tax Expert
Have you previously reported this income in the 2 years that you state you made it in
I see you're no longer online, so let me just lay out the rules for Self Employment income per the IRS..
Although the person that PAID you the money SHOULD have sent you a 1099 MISC in the year that you earned the money, the truth is you were responsible for reporting that income whether you received the 1099 or not
So that was why I asked you if you had already reported the income
are you the payer?
or the payee?
the payer is responsible for filing the 1099 MISC with the IRS........since he states you earned it this year, and you didn't claim in the year you actually earned it, I'm afraid you're sort of stuck
Did you take the expenses for this job in previous years>
Yeah......life is a tough teacher....
Ok........have you continued to be a contractor
do you still know (have a list) of the expenses that you had with this $31,500 job?
and have you already claimed those expenses in the year you paid them?
OK......as a cash basis tax payer, Schedule C, you must report the income when you receive it, which if I'm reading your question correctly is now.........is that ri?
Did you ever file papers to be a Partner with your Dad, and did you have any cost basis in the house?
Ok.........well, you're going to have to file the Sch C
It will include the $31,500 from the other job, plus any other odd jobs you got paid for this year
Are you married? have children?
Ok.......does your new wife have any children at home:
Well, as long as you're married by 12/31, you're married for the whole year for tax purposes, but its the SE tax on this money that is going to hit you fairly hard
You will be paying 15% on the NET (after your expenses) which you will have to be able to substantiate for the IRS should they ever ask you.
On the full $ amount, you're looking at $4450
No, just the mathematical formula............Net SE income x .9235 x .153 That's your SE tax
You could have additional tax also if your Standard Deduction (for Married filing Jointly) which is $12,200 for 2013, and you get 2 exemptions, 1 for you, and 1 for your wife, at $3900 each for a total of
$12,200 + $7800 = $20,000
that is the amount that is tax free from both your earnings and your new wife's earnings
so depending on how much your wife earns, you could be in the 15% tax bracket PLUS the 15% SE tax
Please ask if you have questions
Then you're estimate is close
Let me give you the tax rates for 2013
Here's an easier web site
that's where I got the $ amounts from
yes, you can have an SEP
You can deduct any health insurance you have to pay for yourself as long as you are not eligible to be carried on anyone else's health deduction
SEP-self employed retirement plan\
these can make a difference in the $ amount of taxes you will pay on the $31,500
give me a second, I'll tell you what you can put into an SEP
You can put up to 20% of your Net SE (less the 1/2 adjustment of SE tax on page 1 of 1040) into a retirement plan
This is not to be taXXXXX XXXXXghtly
this is tax derferred money, and there are penalties for early withdrawl
and you may not go above the $5000 allowed per year
but I wanted to let you know that giving money to a retirement plan is available.
Hold on, let me change the format...ok?
Thank you......you too!
Please do not accept again since you have already paid me!