1099 Filing Questions?

Question

I just took on a part time second job as a subcontractor delivering newspapers. The job pays 380 a week with a gas reimbursement that varies considering what gas prices are. At the moment is $25-30 dollars a week. Do I have to pay taxes on the gas reimbursement? Also, can I file and pay taxes every quarter with a 1099? (i'd rather pay the taxes over having to worry about owing money come April). I have no idea if this second job will put me in a different tax bracket either I'm currently in the poor :D end of it. I make about 20k a year so this second job is basically going to double my yearly salary Lastly, I have my regular job which is a W2 set up. When tax time rolls around in April will the 1099 be part of that if I'm paying it quarterly and if so will they have to be filed separately? I have never worked with a 1099 set up and its confusing to me at this point.

Thanks a bunch. :D

ps Not sure if it helps any but I claim 0 dependents with my W2 job.

1600 each quarter????

Are you kidding me? Thats $6400 dollars a year.
The job I have now I only pay just over 1k for the whole year and thats with 0 dependents and the job only pays $1 dollar less an hour.

Are you judging that on state income tax as well? If so, we don't have a state income tax but I can see having to pay $1600 dollars in taxes every three months for a job that pays $1680 a month gross.

I really appreciate all the help but I really need an answer to this question if the taxes are going to be $1600 dollar every 3 months that means my take home after gas that I spend out of pocket (she reimburses 25 a week it cost me close to 55 a week additionally to do the route) is only going to be about 200 a week and giving up sleeping at night 6 days a week is in no way worth 200 a week.

Thanks again

Answer 1

Assuming you're single, most of the second job would be taxed at 15% for income taxes, plus another 15.3% for self-employment tax. You'll show the income and any allowable deductions on a schedule C or C-EZ for the 1099 income. You'll be able to deduct mileage, so keep track of it. You'll show the gas reimbursement as income, but deducting the mileage should more than wipe that out. You'll pay tax on the net after dedutions are subtracted.

If you make quarterly payments of about $1600 each quarter you should be OK.

At tax time next year, you'll file one return for both the 1099 and the W-2 income. The 1099 info will go on the schedule C or C-EZ, you'll figure your self-employment tax on a schedule SE, then the numbers from the bottom of both of the schedules will transfer to your 1040 where your W-2 income is.

Answer 2

Yes you do need to file the income on the 1099 on your personal tax return. You would need to file Sch C. You might want to keep track of any expenses related to that job. You can pay estimated payments each quarter, so that in April you don't have to pay a huge amount with your tax return.