Question about a 1099?

Question

Can someone fill me in on the 1099 form? I am so lost. Does my employeer give me some kind of form? when do i file? What do i need to know? This is my first job working with the 1099 and I am so lost. Any information you have will help. Thanks. Oh also do i file my wages and expenses or just the wages? See I am soooo lost.

Answer 1

You are the first clueless maybe, maybe not independent contractor of the day. I have saved myself a lot of trouble by saving the following text and pasting it into the answer block.
My canned explanation to clueless independent contractors seems to get posted every day:

Some employers try to get around paying employment taxes (social security and unemployment) and other employee benefits like workers compensation insurance by improperly classifying employees as independent contractors. If you are required to show up for work--personally--at a particular time, punch the clock, use the employers equipment and are paid an hourly rate, you are an employee. If you didn't understand the difference when you posed your question, I would be even more convinced that you are an employee. What is your preference, Slotted or Phillips? Complete an IRS Form SS-8 to get an official ruling on your status. This will help you get unemployment if you get fired.

Answer 2

A 1099 is given to an "independent contractor". An "employer" gives a W-2. If you are working on a 1099 basis, you are legally a self-employed independent contract and have neither wages nor an employer.

Moving past the semantics:
a. If you are an independent contract, you receive a 1099 listing what you were paid, which is not called wages. You report this on one line of Schedule C or C-EZ. Then you report the expenses on another line of that Schedule. Then you subtract one from the other and put the difference on a third line. Then you copy this difference to Form 1040 and to Schedule SE. Then you do some more math on Schedule Se and Form 1040.
b. If you are an employee, you receive a W-2 listing what you were paid, which is called wages. You report this on Form 1040. If you itemize deductions (in other words, if you do not take the standard deduction), then you report your business expenses on Schedule A, add them to various other deductions, and copy the total to Form 1040, where you do some more math. If you take the standard deduction and are an employee, then you do not deduct your expenses.

Answer 3

Yes, you'll get a 1099-misc form from the company instead of the W-2 you'd get if you were an employee.

When you file your return, you'll show your income and also any allowable expenses on a schedule C or C-EZ, and fill out a schedule SE to calculate your self employment tax (for social security and medicare), then a form 1040 to calculate your total tax.