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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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I work full-time in a doctors office as a medical

Customer Question

I work full-time in a doctors office as a medical transcriptionist. I was asked by another practitioner if I could do some work for her from home that would be no more than 5-20 hours a week. What do I have to do in order to do this? Do I have to get a business license of my own? What forms do I need for the IRS for taxes and if not using a W4 what form do I use. She would pay me $20.00 a hour for my time.
Submitted: 4 months ago.
Category: Tax
Expert:  Lev replied 4 months ago.

There is NO special business license - and you may start servicing this and may be other similar clients.

You may expect the payer will issue 1099misc form reporting the payment to you in box 7 as non-employee compensation.

You will get this form in January of the following year and will use it fro your tax return preparation.


You actually will be treated as running your own business and will report all business income and expenses - on the schedule C -

The net income (after deductions) will be reported on the form 1040 line 12 -

If the business has net income over $400, it may be required to file Schedule SE, Self-Employment Tax

and net self-employment income is subject to 15.3% self-employment tax.

Self-employment taxes from schedule SE will go to the form 1040 line 57 -

Also - you will deduct half of self-employment taxes on the form 1040 line 27.

Generally - that all you needs tax purposes.

You may also find helpful following publication

Please verify your possible business expenses - that will help to reduce your tax liability.

Expert:  Lev replied 4 months ago.

Another issue is related to paying estimated taxes - however - you would need to estimate your tax liability before that.

The United States income tax system is a pay-as-you-go tax system, which means that you must pay income tax as you earn or receive your income during the year. You can do this either through withholding or by making estimated tax payments. If you do not pay your tax or you pay an insufficient amount of tax through withholding, you might also have to pay estimated taxes. If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and estimated tax payments, or if they paid at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.


As that is your first year of self-employment - most likely - estimated taxes are not required - but you might want to set aside 20-30% of your gross income to cover expected tax liability.

Another option - to increase your income tax withholding from your primary job.

Or you may pay estimated taxes via IRS Direct Pay system


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