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1099 pay
Posted on 11/23/14 at 9:07 am
Posted on 11/23/14 at 9:07 am
My wife and I have full time jobs. I have a second job that is a 1099 job. What is the best way to keep most of the money with out having to pay much in taxes? Should I start a "business"? I wouldn't mind putting the money in some type of retirement fund. Together we make about 170k with out the secind job.
4
Posted on 11/23/14 at 9:25 am to Amyylove
Open a SEP (Simplified Employee Pension). Your 1099 income, if it's not paid by your primary W-2 employer, is considered self-employment income and you can contribute an amount to the SEP and deduct what you contribute from your self-employment income.
It's one of the few ways you can deduct and expense that you pay for yourself.
It's one of the few ways you can deduct and expense that you pay for yourself.
Posted on 11/23/14 at 8:36 pm to LSURussian
Incorporate yourself. It's a few hundred dollars a year. Start a SEP IRA or individual 401k. You can deduct expenses and you can invest up to 25% tax deductible up to $52K.
Posted on 11/24/14 at 7:47 am to Amyylove
Tax evasion.
Posted on 11/24/14 at 9:21 am to Amyylove
Make sure you keep track of any expenses involved with producing this income.
Posted on 11/24/14 at 11:45 am to RocktownHog52
quote:
Incorporate yourself. It's a few hundred dollars a year. Start a SEP IRA or individual 401k. You can deduct expenses and you can invest up to 25% tax deductible up to $52K.
I don't think incorporating is necessary to take deductions or contribute to a SEP as long as you report it as self-employment income.
Posted on 11/24/14 at 12:19 pm to LSURussian
quote:Not quite. Self-employment income is a specific type of income that is part of gross income. Contributions to retirement plans are deducted on Form 1040 as adjustments to gross income, not deductions from self-employment income.
Your 1099 income, if it's not paid by your primary W-2 employer, is considered self-employment income and you can contribute an amount to the SEP and deduct what you contribute from your self-employment income.
The OP would claim the deduction after the amount of self-employment income is determined on Sch. C. The deduction for retirement contributions will reduce the amount of income subject to income tax, but it will not reduce self-employment income subject to self-employment tax. The OP will also be able to claim a deduction for 50% of the self-employment tax determined on Sch. SE.
Posted on 11/24/14 at 2:06 pm to Poodlebrain
It's the same result, nitpicker.
I've been self-employed for years, I've had a SEP all that time and I do my own taxes on TurboTax so I know what forms are used.
He was looking for big picture information, i.e., "What is the best way to keep most of the money with out having to pay much in taxes? Should I start a "business"? I wouldn't mind putting the money in some type of retirement fund."
I've been self-employed for years, I've had a SEP all that time and I do my own taxes on TurboTax so I know what forms are used.
He was looking for big picture information, i.e., "What is the best way to keep most of the money with out having to pay much in taxes? Should I start a "business"? I wouldn't mind putting the money in some type of retirement fund."
Posted on 11/24/14 at 2:49 pm to LSURussian
quote:No, it is not the same result. I have 25+ years of experience providing tax advice and preparing tax returns that back my assertion.
It's the same result, nitpicker.
quote:I've been reconciling my checking account for years, would you trust me for banking advice?
I've been self-employed for years, I've had a SEP all that time and I do my own taxes on TurboTax so I know what forms are used.
quote:I pointed out an alternative approach that could better meet his objectives. Isn't that the point of his request?
"What is the best way to keep most of the money with out having to pay much in taxes? Should I start a "business"? I wouldn't mind putting the money in some type of retirement fund."
Posted on 11/24/14 at 2:57 pm to Poodlebrain
quote:Yes, it is.
No, it is not the same result.
quote:Based on the advice I've seen you give, you have one year of experience X 25.
I have 25+ years of experience providing tax advice
quote:No, you didn't. There is no "alternative approach" in your comments. You just elaborated on what I had already posted earlier by including some anal retentive tax details.
I pointed out an alternative approach that could better meet his objectives.
Posted on 11/24/14 at 3:04 pm to LSURussian
Oh Goody. Thanksgiving family dysfunction.
Posted on 11/24/14 at 3:09 pm to Brummy
quote:
I don't think incorporating is necessary to take deductions or contribute to a SEP as long as you report it as self-employment income.
Incorporation isn't required if you're a sole practitioner or in a limited partnership. The IRS pubs on SEPs are very clear & straightforward.
Posted on 11/24/14 at 3:50 pm to Amyylove
Do you contribute to a 401k at your primary job?
Posted on 11/24/14 at 4:11 pm to Thib-a-doe Tiger
Do you mind if I ask you if its commissioned income or whether you receive this for something like consulting perhaps?
Or do you work in this place of business or perform a service in the employer's office or biz location?
These are important questions for how I'd answer you with what I'd do. Depending on what you're being paid the 1099 for, it may be that you should rightfully deserve a W-2. But I need more background info first.
Or do you work in this place of business or perform a service in the employer's office or biz location?
These are important questions for how I'd answer you with what I'd do. Depending on what you're being paid the 1099 for, it may be that you should rightfully deserve a W-2. But I need more background info first.
Posted on 11/24/14 at 6:44 pm to Iowa Golfer
Oh well. Two of my favorite posters going at each other.
Peace.
Peace.
Posted on 11/24/14 at 7:21 pm to GFunk
I'm an RN doing critical care transport for an ambulance company. They provide they equipment. I provide my professional expertise. I contribute to a 403b/457 and pay into a pension.
Posted on 11/25/14 at 10:01 am to Amyylove
quote:
Amyylove
quote:
I'm an RN doing critical care transport for an ambulance company. They provide they equipment. I provide my professional expertise. I contribute to a 403b/457 and pay into a pension.
I'll be honest with you...speaking from experience in this department, they are more than likely misclassifying you as an employee. You're probably one of many they're doing this to in order to lessen their own tax burden.
If you work in their place of business, or alongside of their employees, identify yourself as a representative of their company and work alongside actual employees doing similar work, then they're failing the "three fold test" and misclassifying you.
I would suggest starting an LLC or S-Corp personally speaking. Lots of advantages in doing that. But they're incorrectly or purposefully misclassifying you. You should be receiving a regular paycheck with normal taxes being deducted.
Posted on 11/25/14 at 11:47 am to GFunk
The ambulance company and the company that handles the RNs are two separate entities. Different owners, but housed in the same facility. I am doing a completely different role than the EMTs that I work with.
Posted on 11/25/14 at 12:32 pm to Amyylove
You would probably be considered an employee of the entity that contracts with the ambulance company for your services. They exercise enough control over the work you perform to qualify as your employer.
Posted on 11/25/14 at 3:21 pm to GFunk
quote:
I'll be honest with you...speaking from experience in this department, they are more than likely misclassifying you as an employee. You're probably one of many they're doing this to in order to lessen their own tax burden.
I've seen this happen to multiple people in the past. How would someone go about challenging this, assuming the employer refuses to change it when asked? Anonymous call to the IRS?
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