when to use a 1099

If you are interested, and if you have time, you can read this:
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

I've had 1099's.
I've never paid quarterly taxes.
But I get W2's too.
I usually have the W2's take as much taxes as possible to offset the 1099's.
I save any and all receipts pertaining to work, so I can deduct as much as possible. Yes, I'd deduct the laptop.
Do you file jointly with the hubby?

accountants are wonderful people. At least mine is.

We file jointly. He makes scads more money than I do. (Not scads, exactly, but scads MORE, comparitively speaking.)

May well need to visit an accountant, yeah.

I don't have a laptop, but I have a tetchy, unreliable computer and I'd love to buy a laptop, and hey, if it's deductible...

I'd think that MAYBE the taxes your husband has been paying might help the taxes that you owe.... Get all your deductables in a row! That'll help.
And remember, I am no expert. I only know what I've done in the past. More deductables, means you made less money, means you pay less taxes...

The whole thing about 1099's is that they take no taxes. So, if you make too much on a 1099, then yeah, you need to pay quarterly estimates....
The one year I mostly worked 1099, my accountant at the end of the year wanted me to pay quarterly, but I said no, cause I never know how I'm going to be working.
So instead, the following year, I just had the W2's take as much as possible. I came out better than even.
For screwy taxes like mine (I've had as many as 6 W2's and one 1099 one year), I like to use an accountant.

Writing fast, cause I got dinner in the oven and I need a shower. Check back later, to see what everyone else says....

You don't have to file quarterly returns against 1099 income unless you are receiving 1099 forms from your client/customer/(boss?). Chances are he plans on sending you a 1099 after the New Year.

Did you sign a contract that stipulated that you are an independent contractor? This usually means that you provide your own equipment (computer), you work out of your own workspace (home office), you keep track of income and claim expenses against that income (supplies, equip, rent, utilities), you have more than one customer, OR, you could have more than one customer without violating an agreement with your client. If yes, then you are an independent contractor and in business for yourself.

If you have no latitude in how you perform your job, were provided explicit training (rather than bringing your own expertise to the job), and perform work that is consistent with work performed at the client's facilities by regular employees then you are a per-diem employee paid on wages.

There are gray areas and overlaps. Companies like to hire 1099 contractors because they don't have to pay them benefits (medical, pension, paid time off) or pay their SS or Medicare. As a 1099 contractor you are required to pay the full 15.3% to FICA. You do get to claim business expenses, but they have to be expenses directly tied to running the business. Buying a laptop for the business and writing it off as an expense is fine as long as that's all it's used for.

Bottom line -- unless you are actually self-employed and are operating a business then it is to their advantage, not yours, to have you as a 1099 contractor.

It would be to your advantage to discuss these issues with your tax man. I was hit with taxes and penalties for not reporting income because my client delayed paying me for 6 months. According to my tax man I couldn't have claimed it untill I recieved it anyway. I called the IRS, he called and wrote to the IRS. In the end he asked if I wanted to fight it and possibly be audited every year for the rest of my life or just pay what we knew I didn't owe. I paid it. Remeber they make the rules and they interpret the rules.
Get advice from a tax expert!!!

I think you're correct, Mr. Response.

Meanwhile, I PM'ed JPB with further details (some of 'em were a bit too personal for me to post here) and she's given me more really good advice.

I'm feeling much more on top of this, though still a lot more to find out.

Evidently I'm in a pretty darn gray area, but seem to trend more towards employee than independent contractor in some ways. I don't think I'm going to raise too much of a stink about that, though -- I think I'm going to focus more on getting ducks in a row. In addition to setting aside money for FICA and probably talking to a professional, this seems to include claiming some expenses to offset the additional expense and bother of being a 1099; I might claim my monthly ISP bill, for example.

I definitely have a lot more to go on but would also appreciate more info if anyone has some.

Thanks again!

http://www.irs.gov/pub/irs-pdf/f1040sc.pdf
Take a look at the list of expenses and see if any apply.

Do not deduct the laptop. It needs to be expensed over a 5 year period. Your expense is just the yearly depreciation expense.

Soz, I think the rule is still that if you have paid 90% of your tax liability at the end of the previous year, you don't need to use quarterly estimates. If husband and yourself have jointly met the 90% level, I suspect that qualifies, but I'm not totally sure.

By filing a 1099, you're just showing the gross earnings on the tax returns and sending in copies with the return.

roger has it been a while since you have done taxes? Anyway, sozobe just go ask someone with tax knowledge.

http://www.irs.gov/pub/irs-pdf/i1040.pdf
1099's as a rule do not get sent in with the return unless there is tax withheld (page 63) :wink:

Some decades ago, we were audited. It was a great learning experience, and we got a very good sense of what the IRS wants. What we do now, just to "cut things off at the pass" is send in some worksheets in anticipation of something that might be questioned by the IRS. We have a copier, and what the hell, all it costs us is possibly a bit extra postage.

We have a fairly complicated return, and have done this worksheet thing since we were audited. We were never audited subsequently.

Phoenix32890
I don't know why my email said there had been a new reply prior to the post I made yesterday (there wasn't one )
I can't post certain information because they don't want the public to know. I don't work for them now........I did at one time.