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HOW TO FILE A TAX RETURN WITH A 1099 / INDEPENDENT CONTRACTOR / TAX PREPARATION



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yo yo yo CPA strength here back with

another video this is a highly requested

video this is about a getting that's a

99 and what you would do with that so

I'm trying to I try to new new program

and everything and we'll get into it

here's the new the new postcard what

they're calling the new tax return for

2018 and I guess beyond now it is just

simply the first first page is whether

your if your filing status your name

your address different different stuff

but the the meat the meat and potatoes

of the tax return is on the second page

here and it is just 23 23 lines it's

been like 74 lines before and really the

only the only thing that I put in I I

filled out a Schedule C and that's what

you would do if you get a 1099 that

means you worked what is a 1099 a 1099

is if you worked for someone during the

year and they did not take taxes out

you're an independent contractor meaning

you're you're self-employed and that

being self-employed is gonna bite you in

the butt

now we'll go over everything but I just

want to show you we made in this in this

example you got a you got a 1099 for

$30,000

I kept it easy and then we had

deductions of $10,000 to make it a

twenty thousand dollar profit of your

business income now think about it from

your employer from the employer

standpoint they didn't have to do

anything but cut you a check now you got

to do all this work you know if and if

you go to dub if you go to w-2 you can

much going any tax software a free file

you can almost probably just do it

yourself the calculations are rather

easy now for this look at all these

calculations you just you just input it

into one you know that you made twenty

thousand dollars and all these different

calculations you know so you're gonna

have your I would I would suggest if you

get a 1099 I would really suggest you go

to a tax professional and get this done

and get your tax return done because the

errors you could make the deductions you

can have and you know we got this new

one a qualified business income this

year and so the common commonly common

question I get is do you have to file a

separate tax return now if you get like

how do i how do I file a 1099 it's still

always it's on the 1040 if you get if

you get money to your Social Security

whether it's you can have one two three

four five w-2s you can have one two

three four or five scheduled sees it

doesn't matter if it's to your social

security number

you're gonna file one 1040 now if you

get if you get a you're not gonna get a

w-2 not to your social security number

but if you get a 1099 to an EIN number

to your business you might or might not

have to file a separate tax return if it

depends how that businesses is a being

taxed because it could it could be a

disregarded entity and it be on a 1040

but if it's sent if a 1099 sent an e AI

n number it could be taxed as a as an S

corp it could be taxed as a c-corp

partnership don't know so basically if

you if you got a 1099 and you had

$20,000 profit you're gonna owe three

thousand three hundred and fifty four so

let's just go over let's just go over

the 1099 and or the tax let's go over

the tax return here and how did this

come about the first thing on here is

twenty thousand dollars on line six and

that came about from Schedule one line

22 now they just had these put six new

schedules in this year so let's go to

schedule one line 22 here's a Schedule

one line 22 this 20,000 right here

remind me this is the first year out of

my eight years of tax preparing that

they're doing a new schedule so it came

from this it came from this twenty

thousand from the Schedule C where as a

Schedule C okay here is the Schedule C

now I thought this would be you got your

1099 for thirty thousand dollars that's

how much for thirty you got it for

$30,000 I just randomly put a ten

thousand dollars in this expenses you

might have more or you might have less

expenses I don't know a whole bunch of

expenses are up here I just wanted to

show you that you'd have I just want to

show you the layout of this so you'd

have a twenty twenty thousand dollar

profit from your so thirty thousand -

ten thousand expenses now whatever your

1099 says that's being furnished to the

IRS so you would have to put that in the

income so you have 25 20 thousand

dollars of net profit

on your Schedule C Schedule CC profit or

loss from business so that that is where

this number comes from on the schedule 1

the Schedule C from the schedule 1 and

that flows through every all the numbers

flow through to these 22 to this one

page of tax returns here everything

flows that all the different schedules

flow through to this page here so this

is where this 20,000 flows in from now

you get half off half off of your

self-employment tax which is down here

deducted from your adjusted gross income

so we're not really going to go we're

not going to go over that but that print

that brings your income down to 18 587

alright it is down in here this 14

deductible part of self-employment tax

it just reduces your income by 14 $1400

now you get your standard deduction see

all your incomes would have been in here

whether you see if so I've gotten a

question before what if I have a w-2 and

a 2 and a 1099 do after you two separate

tax returns no they're both going to be

on this one tax return so now we have

our $12,000 standard deduction because

we're single

see we're single right here and yeah we

were single

so we have 12 $12,000 standard deduction

now this new part this is why I say

pass-through entities and Schedule C

businesses have this new new jobs cut

feature which is qualified business

income

and that could be 20 20 % of your

pass-through income so so it could be 20

percent of your adjusted gross income

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but it's after deductions and everything

so we'll go we'll go to the sheet but it

you basically got thirteen hundred and

seventeen dollars from a qualified

business income deduction and this is

brand new so we you've got the standard

deduction doubled this year and you got

qualified business income deduction

which is brand new and we can go over

there this is what I say if you have a

Schedule C you I would say go to a

professional tax preparer who has the

software to do this because they're not

gonna do it by hand but you know are you

gonna do this by yourself good luck I

mean god bless you if you do but I would

say just take it to a professional and

you know they might charge $200 to do a

Schedule C but you know it's done right

and you get all your deductions so you

get 30 you get thirteen hundred and

seventeen dollars qualified business

income deduction that's twenty percent

of sixty five eighty seven which is your

income after your standard deduction so

there's a lot of different things in

play so no you don't get if you had if

you had more income like if you had w2

income you could get up to thirty seven

hundred dollars off for your qualified

business income deduction but that's not

the case so you get thirteen hundred and

seventeen dollars qualified business

income deduction and this is all these

forms here

all these forms is because now if you

just had if you just had a w-2 there's

no more because I did a tax return with

a w-2 you'd put your w-2 income right

here you put your federal federal tax

withheld right here and then that's it

there would be no other other forms

that's why with a 1099 you know the

employers kind of put in the onus on you

because now you have to I would say get

a professional to do your tax return or

I'm not showing the free software is I

think they would charge if you have a

Schedule C on there but so just having

having the Schedule C you're gonna have

you're gonna have the schedule one

you're gonna have a schedule for you're

gonna have a Schedule C you're gonna

have a schedule se all these different

forms all these different forms anyways

where were so I've been a been super

excited my clients have been super

excited about a lot of my clients have s

corpse and it is a been super excited to

get this qualified business and income

deduction it's awesome that's all I'm

going to say is it's awesome so after

your standard deduction your qualified

business income deduction your half of a

self-employment deduction

you're down to taxable income of five

thousand two hundred and seventy looks

like ten percent of that is your tax so

this is the tax you owe off your income

528 now here is the kicker about why if

you get if you've been getting 1099

dollar you have to pay pretty much 15%

in self-employment tax this is the tax

you would owe the self-employment tax

and see it doesn't matter how many

deductions you have or anything you

could you could owe zero tax

but you still owe self-employment taxes

still 15% of your profit it's not quite

15 percent but it almost is would 15

percent of 20 thousand would be 3000 so

you almost owe three thousand and

self-employment tax it's a little bit

less because they deducted that fourteen

hundred before but this is the kicker

why is it fifteen percent because you're

considered self-employed now this is

this is another part where the employer

put the onus on you and said hey you're

an independent contractor you're not an

employee because you for those of you

who have gotten a w-2 before or been an

employee and gotten a paycheck you don't

get the Social Security Medicare they

take out 7.65 percent of your paycheck

for that and your employer your employer

matches that you don't notice that you

just get your paycheck with 7.65 taken

out for Social Security and Medicare

they also take out federal withholdings

too but your employer has to match that

7.65 percent so you got them

you got money coming out for them too so

it's expensive to run payroll plus you

have to probably have a payroll company

so it's expensive to run payroll so it's

a lot easier for them to just say hey

you're an independent contractor you

deal with it but now since you're

self-employed you you have to match that

7.65 so that's where the 15 percent

comes from so you would owe 528 in tax

and then twenty twenty eight two

thousand eight hundred and twenty six

dollars and self-employment tax so if

you if you if you made in 2018 if you

were single and you profited twenty

thousand dollars

from your Schedule C 1099 independent

contractor business you would owe three

thousand three hundred and fifty four

dollars to the IRS and that's that well

I guess I should have said this before

because no one's still still around

comment like share subscribe if you want

me to do a scenario I can and anyways

y'all have a great day and pay those

taxes anyways peace out man

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