If I didn't pay taxes but got a 1099-misc?

Question

I'll like to know can I still file state and federal taxes and recieve eic
and will they take the money that I didn't pay out of that? Or will they make me pay out of my pocket

Answer 1

A 1099 Misc reports income from self employment. This is also reported, electronically to the gov't so you'll have to file. You may file schedule C, or Schedule C-ez. You are also entitled to expenses you incurred in earning the income. If you qualify for the EIC it is treated as a payment and will be reduced to the extent you have a tax liability. to the extent your EIC is greater than the tax you owe you will receive a refund as the EIC is know as a "refundable" credit.

Don't forget to fill in schedule SE too!

Answer 2

Yes, if you are eligible for EIC, and it is more than what you owe in taxes: Fed, State, Local, Social Security, Medicare...then yes you may get all of that paid. If not, you will owe, and if this is how you will continue to make your living, then get with a tax professional to help you get set up on EStimated Tax Payments. This can keep you from extra $ having to paid for penalties and interest.

Good Luck & Blessings

Answer 3

You must file a return. You'll have to pay income tax on anything over $8,450 (single filers) as well as the Self Employment tax of 15.3% on every net dollar earned.

If you qualify for the EITC, you are entitled to that. If your EITC is enough to cover your income and self employment tax liability, you'll get back whatever the excess is. If it's not enough to cover your liability, you'll have to pay. If you owe a balance, there may be penalties and interest for failing to file the quarterly estimated returns using Form 1040ES.

Any tax service or tax prep software package can guide you through the minefield. If you wind up paying penalties for underpayment of estimated taxes, you should start paying in your estimated taxes quarterly to avoid penalties next year.