What is the tax amount or percentage taken out when a 1099 is filed ?

Question

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Answer 1

There isn't generally any tax taken out if it's Form 1099-MISC you're referring to. That's the drag about being a subcontractor-you're totally responsible for paying your own federal and state income taxes.

Answer 2

Ignore the answers which refer to social security - they are confused and think you are asking about a 1099-SSA. A 1099-SA is a distribution from a health savings account. To answer your first questiosn, yes you must enter this info as it's an income document that has been sent to the IRS which they will match up. However, if used for qualified medical expenses this is not taxable to you. You must have missed answering a question properly. The software will ask you some questions to determine if this distribution is taxable. After entering the info from the 1099 (make sure you have selected the proper income form and you are not entering it under a 1099-SSA or 1099 MISC, etc.) continue to go through the questions and look for one such as "amount of unreimbursed medical expenses". You will have to enter the amount of medical bills that you used the distribution to pay which will eliminate/reduce the taxable amount. If you paid less than the distribution the difference will be taxable. If you can't find that you may have contact Turbo Tax tech support, they will assign a case number and have a tech get in touch with you. You may also find a question where you input medical expenses as a deduction - it may ask you if you got reimbursed in which case you will need to say no. If you already entered the 1099 as an income document and you say you got reimbursed then you are essentially entering that income twice. Unfortunately I can't offer much more help than that. If you still can't resolve the software issue you may have to use a tax preparer because even with using software they know the answers that are supposed to be on the forms and can make sure it's calculated properly.

Answer 3

The 1099 is given to someone who has earned money without a tax withholding. There are several different types 1099-G (gambling) is an example. You win the lotto and get a check for $1M. No taxes are withheld. You need to claim that as income. You can take deductions from those earning (I have receipts of playing the lotto @ $100/week) or have standard itemized deductions. You can therefore lower the basis of the income amount. The net amount of income left need taxes paid on it - the percentage still depends on how you file. I use 40% as a placeholder, but can typically is around 32-38%

Answer 4

Nothing is taken out on the 1099 form. If you are the reciever of an 1099, you can expect to pay self-employment tax on that amount when you file.. which is around 20 %. But you can deduct many things off that amount so your tax wont be too much. Talk to your CPA.

Answer 5

Typically no withholding is ever taken out of a 1099. The only exception is for "back-up withholding" or taxes on 1099-R (pension). You are on your own for taxes when you get a 1099.

Answer 6

No tax is taken out. If you are self-employed and you receive a 1099-MISC, you need to report it on Schedule C or Schedule C-EZ and deduct your business expenses from the gross amount on the 1099.

Any income left over is taxed at the Self-Employment Rate of 15.3%. This is 7.65% employer portion of social security, and 7.65% of employee portion of social security (& Medicare).

Your NET INCOME from Schedule C is reported on the 1040. In the Adjustments Section you get to deduct 1/2 of what you are about to pay for Self-Employment Tax (7.65% of your net income) to get AGI for PERSONAL INCOME TAX purposes.

After deducting itemized deductions and your exemption amounts you get your personal Taxable Income. A tax is assessed on your Personal Income. After credits that reduce your tax dollar for dollar, you add your Self-Employed Tax to your Personal Income Tax to get your Total Tax Liability.

Subtract from your Total Tax Liability the taxes you already paid through estimates, withholding, etc. and you will get the amount of tax you still owe or the amount of tax you have already paid.