will i receive the same amount of money back this year in taxes?

Question

Last year i was in unemployment and my income was a little over 7000. This year i worked parttime for an individually owned company and made almost the exact amount of $. This year i will receive a 1099 instead of w2 and wandered if anyone could tell me if i would receive about the same amount back that i did last year. i will be filing the same as last year.. nothing has changed except instead of w2, this year i am receiving a 1099. Is there a difference? Will i receive the same amount?

Answer 1

There's a HUGE difference.

You have taxes withheld from your checks when you were paid as an employee. They took out too much, and the IRS sends you the difference.

With a 1099 - you are paid the full amount. No taxes taken out. Unless you made tax payments to the IRS on your own during the year - you have paid no taxes...so there is nothing to "get back".

You will owe money. You need to file Schedule C to show your income, and any expenses you may have. I highly recommend you get help doing this to avoid mistakes, and to make sure you take all the deductions you are entitled to.

Answer 2

No you will probably not. It all really depends on the customer you did work for.

Did they take taxes out of what they paid you?
If the answer is yes, which is highly unlikely, you may get a return, however, it will not be the same amount as last year as tax laws change each year.

If the answer is no, you will owe money. Usually when you receive a 1099, they have not taken any taxes out of the money paid to you.

For future reference, any time you will be receiving income from a company or individual that will be sending you a 1099 at the end of the year, you should be making estimated tax payments to the IRS based upon the amount of money you are making.

You are probably going to end up owing both state and federal. I would start saving those pennies.

Answer 3

No, you will not. Income on Form 1099 is subject to Self Employment taxes at 15.3% on the net profit from the business activity.

If you were a W2 employee, you'd pay half that on your wages and the employer would pay the other half. Therefore your total tax bite will increase by 7.65% of the net profit.

If you have no business expenses on that $7,000, the SE tax would be about $535.00. If you had no withholdnings and don't qualify for the Earned Income Tax Credit you'll have to pay that with your return. If you didn't make quarterly estimated tax payments using Form 1040ES, you may also have penalties and interest for underpayment of estimated taxes.

Answer 4

It varies every year. You could get more or less.