I clean houses, but I don't draw alot of money.So what does one do in my case?
2007-02-11 22:23:38 · 4 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Excellent answer by waggy. I would just add that cleaning houses means you will have transport, so you might want to do a 2106 as well.
If you earned more than $433 after all expenses, you must file a return as you will have SE tax to pay.
2007-02-11 22:46:41 · answer #1 · answered by skip 6 · 0⤊ 0⤋
I work for myself and I think the easiest way is to use a tax software package that supports the use of Schedule C. Usually the software will say "small business". The down side is that the software will cost you around $75, but the up side is it will steer you through a lot of the forms and help you file those that you need.
"SE" is self-employment tax and it's a bummer because it is in addition to regular income tax (but it's all supposed to even out because when you're self-employed there is no FICA taken out of your checks).
The main thing about being self-employed is that you get to deduct (subtract from your income) just about EVERYTHING you spent to be in business: Supplies, mileage driving to your work sites (as long as it's not your office), use of your home for an office with certain restrictions, possibly half of your cost of meals when you're away from home, etc.
Be aggressive in what you deduct, but report all money earned. If you're ever audited and they find something you should not have deducted then you owe a little tax and penalty. If you hide income, it can be criminal.
You can always use someone to prepare your taxes, but it will cost as much or more than the software and you're trusting them to do it right. If you trust them more than yourself, that is the way to go.
Keep receipts for everything either way!
2007-02-12 07:00:52 · answer #2 · answered by rhinoboy82 1 · 0⤊ 0⤋
You file a 1040 and use schedule c and se. You could also qualify for the earned income credit.
2007-02-12 06:40:37 · answer #3 · answered by waggy_33 6 · 1⤊ 0⤋
You file Form 1040, along with either Schedule C or C-EZ and Schedule SE.
Schedule C or C-EZ is for calculating your income and businsess expenses.
Schedule SE is for calculating your Self Employment tax.
2007-02-12 07:28:16 · answer #4 · answered by Bostonian In MO 7 · 0⤊ 1⤋