If Iclaim my income from my side work 1099 on 1040 with my fulltime job do Istill pay self employment taxes?

Question

do i pay taxes on the same income twice?

Answer 1

You'd pay income tax once on each type of income. The net from your 1099 income goes onto your 1040, adds to your W-2 income, then income tax is calculated on the two together.

The tax calculated on the schedule SE is a different tax - it's for social security and medicare. It's calculated only on your 1099 income, because your employer already deducted social security and medicare taxes from your paychecks for your W-2 job, and paid an employer match on the amount deducted.

For your total tax for the year, the two are added together - the income tax, plus the self employment (social security/medicare ) tax.

Answer 2

Yes, you would pay self-employment taxes on 1099 income that you have earned. However, you would be able to deduct any expenses you incurred against that 1099 income; mileage, supplies, travel, etc. Your best bet is to report the 1099 income on a Schedule C, that way you get to also deduct any expenses that you had for that income. With a W-2 job, you have not only federal withholding taken from your paycheck, but also social security and medicare taxes too. The self-employment tax for 1099 income is that social security and medicare tax. But since as a 1099 person you are "self-employed" you pay 100% of the social security and medicare tax, since you are your own boss. Being a W-2 employee, you pay half the social security and medicare taxes, and your employer pays the other half. There is a limit though to the amount you have to pay social security taxes on, which is $94,200, for 2006.

By the way, the guy that said if you get less than $3,000 that you don't have to worry about it, is wrong. You have to pay SE tax on net 1099 earnings above $400.

Answer 3

If you are self employed, you are responsible for depositing your own withholding & social security taxes (quarterly). Self employed have to pay the 7.65% social security that an employee's boss pays. So, yes, the self-employed get screwed. But, the good news is as an independent contractor, you can claim expenses. Expenses like mileage to the job site, and any other expenses of doing your job that you pay for. Pens, paper, software, etc, etc. Expenses reduce your tax liability. Yeah, you are probably screwed. At least a little. Now you will know how much you need to pay for next year. Good luck, the tax man sucketh

Answer 4

Yes, You still pay self employment tax
pepsiLim is correct on the self-employment tax issue.

Answer 5

im going to give you a tip, dont claim it, you will get screwed. if you did not recieve more than 3000 grand, you dont have to do anything, not even claim it. if you did it in cash, keep it in a safe. If you plan on adding it to your income, write off a part of your house as an office, your cars, as work vehicles, shovels, etc: If you can levereage your business to offset your taxes on the personal side, then it would be worth it.