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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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My daughter,22, is working for a woman but not considered an

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My daughter,22, is working for a woman but not considered an employee of hers. She is more like an independant contractor/sole proip. She started in August and will need to pay taxes on her income. She recently had to purchase a new computer is this about to be written off and how does she go about everything re: takes and expenses. My daughter haas no health insurance and needs to get it. What is the best way for her to get the insurance, as an individual or as a "owner". She is not a dba or a llc. Her employment is mainly in Manhattan, but does go upstate for things. Please, Please help! She grosses $31,500.00 a year. Is there a free service that she can go to for answers? I am a wreck over the unknow. She does not have the money to pay for an accountant.
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.

Hello mommak,


As an independent contractor, your daughter will simply report her income and expenses on Schedule C of her tax return. When tax time comes around, if she is comfortable working with tax forms then this is really something she can do on her own just by following the instructions for Schedule C. If she is not comfortable working with tax forms, then any tax firm such as H&R Block or similar agencies can file her return, so you would not need to incur the expense of an accountant.


Any expenses that your daughter has directly related to this job may be deducted against the income that she is paid. She will then only owe tax on the net amount after expenses. Her expenses might include such things as use of part of her home as an office or supplies that she purchases, licenses she holds, etc. As far as the computer that she purchased, she would claim a depreciation allowance each year as an expense for the next 5 years. As an example, if she paid $1,000 for the computer, then she would claim a deduction of $200 per year for depreciation for each of the next 5 years. This is assuming that the computer is used entirely for business. If it is also used for personal use, then she can only claim the percentage that it is used for business purposes.


As far as health insurance, she can simply purchase an insurance plan on her own as an individual. She would not qualify to purchase one as a company since she has no employees. The cost she pays for her premiums would be an allowed deduction on her tax return.


If this was helpful please press the Accept button. Positive feedback is also appreciated.


Thank you mommak


Customer: replied 7 years ago.

She has lived in upstate NY until August then moved to NYC to start the job. How would she file as NYC has a seperate tax filing in NY. Does it depend on where her priomary residence is or is it where the money is being paid to her. If she is paying her own tax and living upstate for most of the year is it NYC tax or NY state tax form?


Expert:  Merlo replied 7 years ago.

Hello again momma,


The NYC earnings tax will apply if the services she renders are rendered inside of NYC or if she is a resident of NYC.


If during the time she lived in upstate NY she worked from her home and did not work in NYC, then she would not owe NYC earnings tax on the income earned during that period of time. However, if she lived upstate but worked at an office in NYC, then the NYC earnings tax applies. And it will apply to all earnings she has now that she is a NYC resident.



Thank you mommak



Customer: replied 7 years ago.
I am a bit confussed. She worked until August in upstate. She holds primary residence here in Albany. She computes several times a month to Albany. She is subletting month by month down there since sept. 1.
Expert:  Merlo replied 7 years ago.

Where is the office located that she actually performs this work?


Customer: replied 7 years ago.
your last answer did not come through.
Expert:  Merlo replied 7 years ago.

I asked you to please tell me where the office is located where she actually goes to perform this work?


Customer: replied 7 years ago.
Expert:  Merlo replied 7 years ago.

Hello again mommak,


If the office she is working from is located in Manhattan, then she will have to pay NYC earnings tax on her net income, regardless of where she lives or where her primary home is located.



Thank you mommak



Merlo and other Tax Specialists are ready to help you
Customer: replied 7 years ago.
Thank you.
Expert:  Merlo replied 7 years ago.

Thank you for using JA