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Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2355
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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I am receiving State Retirement Pension monthly. 2014 I have

Customer Question

I am receiving State Retirement Pension monthly. 2014 I have paid $1876 in Federal Taxes. 2015 my pension had a slight increase and $1870.56 was withheld. This year I earned $2,400 and I owe $701 after I completed my taxes, this does not seem right.
Submitted: 7 months ago.
Category: Tax
Expert:  Anne replied 7 months ago.
HiI'm Anne. I've been preparing taxes for 28 years and I'll be happy to help you. Before I can help you, I need to know how how much your pension income is, and how you file. Single? Married? and do you have any other income such as Social Security benefits. Thank you
Customer: replied 7 months ago.
Last year, my pension income was $25,651 and paid $1,875 in Federal Taxes. 2015 my pension was $26,016.60 and $1,896.24 federal taxes was withheld. My earnings on Form 1099-MISC was $2,450. with no federal taxes withheld. I don't have other income and filed single, no Social Security Income.
Expert:  Anne replied 7 months ago.
The reason that you owe this year is due to the $2450 payment with no taxes taken out. Was this paid to you on a W2 (where at least Social Security and Medicare would have been withheld) or you were you paid on a 1099MISC?
Expert:  Anne replied 7 months ago.
If this was paid on a 1099MISC,OR if you did not receive any reporting document that showed this income, then you are considered self employed for this income.You may net any costs you incurred while doing this job, which would then be deducted from the $2400, $ for $.As it is now, the biggest reason you owe the IRS this year, is due to the SE tax you are paying on the $2400. Please see below:https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses If you received a W2, then you can not take these deductions. If you have found this answer helpful, please take the moment to rate positive by clicking on the stars.It is ONLY through positive ratings that we are compensated for our time and knowledge. Thank you for choosing just answer.
Customer: replied 7 months ago.
no taxes were taken out. I am not satisfied with the answer. I can pay for this conversation online, however, don not want to be a member because my taxes each year is simple except for this year. I don't believe I will need this service again.
Expert:  Anne replied 7 months ago.
Like all of the tax experts here, I strive to give only great service Can you please tell me why you are not satisfied with the answer?
Expert:  Anne replied 7 months ago.
If there were no taxes at all taken out, then the IRS will treat you as if you are self employed for that $2400 income, but you do get the benefit of being able to deduct any expenses you incurred while earning that $2400