Comments on: Reporting 1099 Income

By: Ronnie

Ronnie — Thu, 19 Feb 2009 23:10:45 +0000

I am a teacher and work full time. My husband is not employed but earned about $2000 in 2008 designing websites. He has received a 1099 for that amount. Will he owe taxes on the $2000 that he made? We file together.

Thanks!

By: Kristine

Kristine — Wed, 28 Jan 2009 18:25:52 +0000

Brent – it depends on the person issuing the 1099; if they are a cash basis taxpayer, they will probably issue the 1099 based on when the income was actually paid, if they are an accrual basis taxpayer, they will issue the 1099 based on when the income was actually earned. For an accurate answer, you really need to ask the person issuing the 1099.

By: Brent Smith

Brent Smith — Wed, 28 Jan 2009 17:28:45 +0000

In reporting information on a 1099 is the amount included based on when the income was earned or when the payment was process. For example if a check related to 2008 was not processed and dated in 2009 does it show in 2008 pr 2009?

Thanks,

By: Kristine

Kristine — Wed, 07 Jan 2009 04:22:21 +0000

Mrs. Smith – thanks for the comment.

If you are an independent contractor (you receive a form 1099 instead of a W-2), then you will need to report your income on Schedule C, which is then attached to your personal income tax return.

You are allowed to deduct business expenses from your income, such as mileage, supplies, and other out of pocket expenses necessary to perform the services you provided.

You also need to complete Schedule SE to compute your self employment taxes. Your total tax on your net profits will be the SE tax (15.3%) plus whatever tax bracket you and your husband fall into (could be anywhere from 10-35%).

Most tax planning strategies needed to be implemented before 12/31/08 to help your 2008 taxes, however you still have time to contribute to an IRA to reduce your 2008 taxable income.

Hope this helps!
Kristine

By: Mrs. Smith

Mrs. Smith — Mon, 05 Jan 2009 23:54:37 +0000

I am married and we both of full time jobs where taxes and everything is already taken out. However, with this economy I started working a part time job in September-December making a total of almost $8,000. The company will issue me a 1099. How do I report that, about how much taxes will i have to pay and what are some tax savings tips?

Thanks for any help you can provide.

Mrs. Smith

By: Kristine

Kristine — Fri, 05 Dec 2008 14:06:04 +0000

Hi Melissa – QuickBooks, Quicken Home & Business, or spreadsheets are all good ways to track your income and expenses. The most important thing is that you find a system that you will actually DO.

By: Melissa

Melissa — Fri, 05 Dec 2008 11:46:12 +0000

Great site! Definitely adding you to my subscription list!!! How do you recommend people track their income? Quicken-like software or can simple Excel spreadsheets do the job?