I received 1099-MISC for 4367 dollars. How do I show this on my federal return 1040?

Question

The tax preparer added this amount on line 12 as Business Income (Schedule C-EZ) . Then he also calculated self employment tax for this amount by filling out Section B - Long Schedule SE which came out to 617 dollars which he showed on line 58. By doing this am I not paying taxes twice on $4367 since the $4367 was added to to the total wages and the taxes are calculated on that amount and again the calculated tax of 617 based on $4367was added to the taxes calculated based on total wages which included $4367.

Answer 1

If you received a 1099 Misc for 4367.00, you have not paid any taxes. Unfortunately, when you are "self-employed" you are responsible for 100% of your Social Security and Medicare withholding as well as Federal and any State taxes.

Did you not have any out of pocket expenses, mileage, tags, insurance or travel, or anything like that? You also, should get
some break for state taxes paid if that is applicable. Also, if this was your only income, you would be eligible for Earned Income Credit if you are between 25 - 62 (2006).

good luck

Answer 2

If the amount was shown on the 100-misc as non-employee compensation, then the preparer was correct in how it was handled.

Self-employment tax is different from income tax, although you pay it along with your return. It's for social security and medicare, and is what would have been withheld for those if you'd been an employee, plus the matching amount the employer would have paid. You should have gotten one small break on this - half of the amount should have been taken on line 27 of your 1040 as a downward adjustment to income.

And don't pay attention to snacgirl's response - she'll be hearing from the IRS one of these days looking for back taxes, plus interest and penalties, on what she should be paying. If you have self-employment income, then by IRS definition, you're operating a business.

Answer 3

Sounds to me like your preparer does have you paying double taxes on that amount. I also receive a 1099-MISC for a side job I do where no taxes are taken out during the year. All I do is add my income shown on it to my income from my W-2 and put the total on the wages line on the 1040, then proceed as usual. I don't do a Schedule C because I'm not operating a business; it's just an odd job I do a couple of days a month.

Answer 4

sounds like you know more about taxes then your accountant. 1099 misc is income without expense remove to be a "taxable income" therefore you have to remove the expense from the income using a sch c to get a taxable income amount. if you place it on the wage line and sch c line on your fed return then ya your being double banged. most 1099 misc don't get much tax cause most of the expense reduce the income to almost nothing taxable. next time get a CPA, at least if they screw up you can report them to the CPA board.

Answer 5

Since you have 3 answers, I have to join in. As usual, TRUST JUDY.