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Is there a way to change my 1099 misc filing?
You have not been hired as a 1099MISC but as an independent contractor.Its not clear from the facts that you have presented as to whether or not youare actually an independent contractor or an employee so please read thisIndependent Contractor SelfEmployed or Employee and then ask yourself ifyou have been classified correctly. If you believe that you have been incorrectly classified as an independentcontractor when you are actually an employee then you can do a couple ofthings 1. File Form SS8 httpwww.irs.govpubirspdff... to ask for an IRS determination of your status 2. File Form 8919 httpwww.irs.govpubirspdff... with your tax return. Note that you must file the SS8 before you file your tax return with Form 8919.Realize that if you do this the IRS will contact the company so there issome risk to your position here. If you dont want to go this route Iunderstand but then you are going to have to file Schedule C and pay the SEtax. The IRS is going after companies that routinely hire people asindependent contractors who are truly employees because quite honestlytheyre pushing their responsibilities onto people like yourself. But if you are properly classified or if you choose not to challenge thecompany on this issue you should look carefully for expenses that you cantake against the Schedule C income supplies that you purchased out of pocketto use at work and for which you have receipts for example. That will reduceyour overall tax burden.
Why does Form 1099-MISC have a fishing boat proceeds income category?
Some crew members work for the ship they get W2s. However there can be selfemployed crew members who get 1099s.Selfemployed crew members 1099s must include in income the gross fishingproceeds including meals the received and their share of fuel and bait.The ship operator typically pays for the meals because you can’t leave tograb a bite to eat on the ocean. From the gross amounts on the 1099 theselfemployed crew members are allowed to deduct Meal and Incidental Expensesusing the per diem rate established by the GSA.
Can a 1099-MISC be reported as a long term capital gain?
Usually no. As a previous answer pointed out if the payment is capital gainit shouldn’t have been reported on a 1099MISC.But under the tax law you never say never. I can think of at least onesituation where compensation reportable on a 1099MISC can be eligible forcapital gains treatment. That is an independent contractor who receives a“severance” payment to buy out a contract could be eligible to treat thecontract as a capital asset and a portion of the payment as a capital gain.But that doesn’t happen too often.
How can I minimize my taxes as a 1099-MISC contractor?
There is only one way keep scrupulous records of things that decrease yourprofits and therefore your tax burden. Thats not so difficult when youre in business. Keep a mileage log keepreceipts from businessrelated meals and write off your home office. Thetough part is not coming up with zany ideas that end up red flags for the IRS.Common examples is people trying to write off their cell phone usage ortrying to write off their clothing as a uniform or their car as a companycar. In a sense if youre not a crook youll never be able to predict thetype of paper trail necessary to prove youre not a crook. Since there are300M people in the US every little idea you come up with already has specialrules already created from millions of pages of precedent. All of the aboveespecially raises flags if youre getting Earned Income Credit while having aSchedule C. So while you can easily minimize your taxes you do have to pay apro to do your taxes once you start trying anything.
Was it wrong of my employer to send me a 1099-MISC for business trip expenses?
A2A.If you are an employee then the employer was wrong.Employee business expenses are reimbursed by employers under two types ofplans accountable and nonaccountable. Any reimbursement plan that does notmeet the requirements for an accountable plan is by definition nonaccountable.An accountable plan must meet the following requirements 1. The expenses must have been paid or incurred by the employee while performing services as an employee for the employer. 2. The employee must adequately account for the expenses to the employer within a reasonable time after the expenses are paid or incurred. This is usually implemented through the filing of an expense report. 3. If the employee receives reimbursement for the expenses in excess of the amount paid or incurred the employee must return the excess within a responsible period of time this allows for accountable plans in which the employee draws a travel advance.If your expenses were reimbursed under an accountable plan the employer doesnot need to give you any tax form. If your expenses were reimbursed under anonaccountable plan the employer is required to include them in your wagesreported on Form W2 and make the appropriate income and payroll taxdeductions. In no event should the reimbursements be reported on Form1099MISC.Contrary to some of the other answers and assuming that you were reimbursedunder a nonaccountable plan it is not correct to report this on Schedule C this is not selfemployment income. The correct way to report this is to fileIRS Form 8919 Uncollected Social Security and Medicare Tax on Wages with yourreturn. On Form 8919 you use Reason Code H indicating that the amountreported on Form 1099MISC should have been included with your wages andfigure your share of the SS and Medicate taxes that should have been withheld.You can also fill out IRS Form 2106 Employee Business Expenses to determinewhether you have sufficient expenses to deduct on Schedule A keeping in mindthat as an employee your can only deduct the expenses to the extent that theyexceed 2 of your adjusted gross income.
How do you report rental income earned from Airbnb on your 1099-MISC tax formif you don't own the property?
You report rental income earned from hosting the same way regardless ofwhether you own the property or not. This year Airbnb recently changed theirpolicy and will only be issuing 1099s if you made more than 2022. AND hadover 200 transactions. If you did not meet this threshold you may notreceive a 1099 but you still must report all income not doing so would betax evasion.For more information regarding Airbnb and the implications on taxes check outthe blog on Shared Economy CPA www.sharedeconomycpa.comblog
What happens if a company issued 1099-MISC to its contractor but did not filea 1096 or submit the 1099-MISC copies to the IRS?
I like Lislue’s answer the best of the three so far. Once you file your taxesand include the 1099 income the irs computers will go looking for a matchepecially if you use software and input the data from the 1099 into anequivalent 1099 form in the software. When the computers don’t find a matchthen they go looking for the source documents hence a letterinquiryauditgets startedsent out. Finespenalties etc get assessed.the source company msy selftrigger an audit when they deduct a high wagesexpense but have not submitted any W2 or 1099 forms. It might take a yearbut the irs will catch up.
What is the cheapest way for me to do my taxes for my 1099 MISC form?
Yes always go for cheap. The problem here is that you can find free or almostfree tax prep services. You can go to what appears to be cheap retail tax prepchains. You can buy cheap tax software. You can do all these things cheaply.Or so it appears.The problem is that your “cheap” solution may be the most expensive solutionyou will ever encounter. So you do it yourself because you have a cheapsoftware program. Guess what You just shot yourself in the foot. Unless ofcourse you know all the ins and outs of the tax law. Unless you have a goodgrasp of the relevant portions of 38.000 pages of tax gobblygoop written bylawyers for lawyers in a language that only approximates English. Unless ofcourse you kept up with the hundreds of changes that occurred during theyear including the Code Regulations Revenue Procedures and tax courtcases. Don’t bet that your 45 tax program did that. They didn’t. They can’t.If you believe that you know enough to properly complete a Schedule C with thelowest amount of tax with no formal training in tax law and without spendingat least 40 hours a year in refresh training you are deluding yourself. “Butit’s only a simple tax return.” Sure you have convinced yourself. Maybeprobably not.If you think a CPA is “too expensive” then you have just been seduced by thepower of advertising. You have succumbed to the siren call of ego empowerment.Is it arrogance Is it false confidence Gee I don’t know. What I do know isthat a good CPA can usually save a client many times their cost. It may nothappen on one return but over a series of years the advice counselplanning and technical expertise you get with a CPA or EA will pay handsomedividends. Over my 40 years of practice I have seen many self and tax prepchain prepared returns and in virtually all of the cases have found somethingthat would have saved the taxpayer lots of money. More than justified thecost.But of course these are intangibles unquantifiables. You know exactly whatthat cheap tax prep software costs so focus on that. Forget about thehundreds or thousands of dollars in extra taxes you will pay because you don’tknow the ins and outs of the law. Actually the IRS once did a study on thisand found that most taxpayers overpay their taxes. Kinda seems contrary towhat you would expect right I mean when they audit you they want moremoney. That’s correct. Oh and when you selfprepare you are on your own ifyou are challenged. No problem right If you buy into that please you needserious reality therapy. The tax system is an adversarial system. You wouldn’tface a Ninja with a water squirt pistol would youEnough said. SWSWSW. Some will some won’t so will it be. Sorry I ranted onabout this but I have faced this issue with so many people including membersof my family and it’s a sore point. I just hate to see people overpay theirtaxes deceived into thinking they got a “deal” on some cheap tax software.
What industries use the 1099-misc form?
IRS Form 1099MISC is an information return that tells the IRS and othergovernment agencies that the person named in the form has received taxablepayments during the year. It’s not specific to any particular industry.When Form 1099MISC must be filedThe basic rule is that you must file a 1099MISC whenever you pay anunincorporated independent contractor • that is an independent contractor whois a sole proprietor or member of a partnership or LLC • 600 or more in ayear for work done in the course of your trade or business.If you’re a broker who employs independent contractor agents you need to file1099s for them as well as any other contractor you paid at least 600 during2012.Remember however that a 1099MISC need be filed only when an independentcontractor’s services are performed in the course of your trade or business. Atrade or business is an activity carried on for gain or profit.You don’t have to file a 1099MISC for payments for nonbusiness relatedservices. This includes payments you make to independent contractors forpersonal or household service • for example payments to babysittersgardeners and housekeepers. Running your home is not a profitmaking activity.Example Eddy owns several homes he rents out to tenants. He is in thebusiness of renting houses. Eddy pays Linda who operates a painting businessas a sole proprietor 1750 to paint one of his rental houses. Eddy mustreport the 1750 payment to Linda on Form 1099MISC.Example Eddy pays Linda 1750 to paint his own home. He lives in this homewith his wife and family and it is not a part of his home rental business.Eddy need not report this payment on Form 1099MISC because this work was notdone in the course of his business.In addition some businessrelated payments do not have to be reported on Form1099MISC although they may be taxable to the recipient. These include payments to corporations except for incorporated lawyers payments for merchandise telephone freight storage and similar items and payments of rent to real estate agents but the real estate agent must use Form 1099MISC to report the rent paid over to the property owner.
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