Yay! Taxes! Married, filing jointly, freelance work & deductions..!?

Question

This would be the first time I've ever filed with my spouse, but we have a bit of a situation.

We did some freelance work in 2006, but saved all our receipts for expenses because of the freelance work. So..

A) Which form do I use for joint filing with deductions
B) How do I do deductions?? Is it the total of all the receipts that gets added up and then deducted from the total somewhere?

Any help is appreciated! Thank you!! :-D

Should I use the 1040EZ?

Answer 1

Use a full 1040 form (blue). Now, wait a minute. You don't mean "deductions". Your freelance work constitutes Self Employment, so you need to file Schedule C. This is different from itemizing deductions. It involves reporting business income. What you are calling "deductions" are actually all of your business expenses, for advertising, supplies, telephone, office space (or part use of your
residence).

So follow Schedule C, reporting your gross receipts, and listing your ordinary and necessary costs of doing business, in the spaces provided. Then, when Sked C is done, you transfer your total self-employment income to your 1040. You are also going to be calculating your Social Security taxes, in the process. You might then itemize deductions, or just use the Standard Deduction.

This might be a big surprise to you. Here it is the last day, and it's more complicated than you thought. You can file a form for extension of time to file, along with a deposit of your estimated tax liability (what you think you will owe), and have until August to figure it all out, if you need to.

Answer 2

Use schedule C for the freelance work, or schedule C-EZ if you qualify - it's easier, but has a number of restrictions - they're printed on the form, so you can tell pretty easily. The expenses will go right on the C or C-EZ, and be subtracted from the income. Then if the net is over $400, you'll use a schedule SE to calculate self-employment income (social security and medicare). The numbers from the bottom of the schedules transfer to your 1040.

Answer 3

If you're filing with deductions, you have to file the 1040 form for federal.

Taxes are easy to do yourself......just follow the form step by step and you'll be able to figure it out yourself. Or better yet, invest in a program like Turbo tax and fill in the answers to the questions it asks.

But hurry......if you owe, your payment MUST be postmarked tonight in order to avoid penalty from the government (if you're sure you're getting a refund, then don't worry about it....the government doesn't care if they hold your money, you don't get anything extra for them using your money in the meantime!)

Good luck!

Answer 4

Also filing jointly can put you in a different tax bracket. My wife and I by ourself fell in the 25th percent bracket, but together we fall under the 15th percent bracket .... we were not taking out enough for federal... talk about sticker shock!!! We were about $3000 short that year. Just for you information.

Answer 5

Use 1040. Report your free lance earnings and expenses on Schedule C-EZ (or C) and SE.