HOW & WHAT can I write off for taxes being 1099. I paint murals in private homes for a self employed person.?

Question

I have no knowledge of the US tax system and the last thing I want is to owe huge taxes at the end of the year. To complicate matters, I am also a Resident Alien - I have a green card so I would like to do things legit. So what can I write off, how to I do it, who does it work? e.g. say I spent $10 on paint, does that mean I have to pay $10 less tax? PLEASE HELP!

I have a regular job earning about $1000 p/m and the 1099 job brings in about $700 p/m. The regular paycheck job has taxes deducted already. Will I still have to pre pay the quarterly for the 1099 job as it brings in such a low amount? And how to I prepay the quarterly? I wish they'd give you a USA instruction manual when they give you a green card! Thanks

Answer 1

Income from self-employment requires you to pay your own taxes from what you make.

You will need to use Form 1040 (what we call the long form) and Schedule A. Depending on other things about your business, you may need to use certain other schedules or forms to support other particulars.

Basically, you can deduct anything you pay out as a direct result of doing business. The price you pay for paint would be one, as you mention. Also, your expense to get from your base of operations (usually, your home) to the client's building and back would be allowed as a deduction.

A deduction affects your gross income, but does not lower your tax liability by the same amount. The tax liability is based on a complicated figuring of a percentage of your gross income, depending on how much you make.

For the most part, Form 1040 lets you lay out your income and deductions for various things, but Schedule A lets you show business-related expenses that will decrease your tax.

This is the important part to keep from having to pay all at once at the end of the year: If you think you will owe taxes (and who doesn't?) you need to make quarterly payments (every three months) of estimated taxes, or face a penalty, along with any taxes owed, at the end of the year for not reporting the income as you go.

Along with Federal tax, you will also need to pay taxes to the state where you live (I think only two states do not have income tax).

If you are making a good living with your business, I'd suggest that you get a bookkeeper who knows about taxes (a higher level of this idea would be to hire a CPA firm, who will charge $100 or more per hour to prepare your tax return for you) or get a computer program like TurboTax Deluxe for about $40, which walks you through the process and will include any forms and schedules you should need, and will include a way for you to do your state taxes, too.

I've used TurboTax Deluxe in my sole-proprietership business for years, just because I never made enough with it to afford a CPA firm.

Answer 2

You can deduct all the expenses related to your business. This could include the following:

Cell phone used for business
Paint
Brushes
car/truck expense
home office

You take your total income and subtract your expenses, then you pay tax on that amount. In addition to federal income tax, you have to pay self employment tax, too.

Check out the applicable publications at the IRS website

http://www.irs.gov

If you need more help, H&R Block will answer questions at no cost.

Good luck!

Answer 3

Be sure to keep track of what you spend and keep your receipts in case of an IRS audit. As a resident alien, you are treated the same as a US Citizen for tax purposes. If you do not track your income & expenses with software (Quickbooks), use an excel spreedsheet and write it all down.

Answer 4

work clothes are only deductible if you cant wear them outside of work. Like a police officer or fireman. Business suits or maybe a painter that works in white shirt and white pants that can be wore anytime. But like if you need special nonslip shoes for work things like that are deductible.

Answer 5

Go hire a good accountant. A $100 consultation will save you thousands in the long run.

Answer 6

Too much to list,,,all materials,,,gas to the job(keep track of your mileage),,,,work clothes,,,,even your cell phone,,,,anything , and Everything you use for work !!!,,,you can even throw in an occasional meal ( business lunch,,,etc),,,,,,file with turbo tax,,,or pay the $60.00 to have a pro do it,,,,just have them explain it so you can learn,,,,,they also have educational material you can check out of a library for free,,,,cd roms ,,books all kinda crap,,

Answer 7

You take your gross income, substract anything you spent on your business, like materials, car expense, etc, and you pay tax on the remainder.