What percentage of 1099 form is taxed?

Answer 1

Form 1099-MISC is Miscellaneous Income. The Payer (the person who issued it to you) considers you as self-employed, not as an employee. How much you might pay in taxes on income listed on a Form 1099-MISC depends upon a number of factors.

One, your business expenses that are subtracted from the 1099-MISC income.

Two, whether you'll have to pay self-employment taxes on your net income (gross income minus expenses).

Three, other types of income that'll be included on your tax return.

Four, any adjustments, credits, or deductions (standard, itemized, etc.) that you'll claim on your return.

For more information, go to www.irs.gov/taxtopics for Topic 762 (Independent Contractor vs. Employee).

Answer 2

You will not know the correct percentage amount until your Schedule C or C-EZ of the 1040 tax form is completely correctly to determine your net profit amount and the amount of your self employment tax and the net profit amount will end up on the 1040 tax form page 1 line 12 Business income or loss and will be added to all of your other gross worldwide and subject to income taxes at your marginal tax rate.

When you are a self employed taxpayer then you are responsible for all of your own FICA self employment taxes of 15.3% plus any income taxes on your net profit from your business operation at your marginal tax rate.

You will need to report that income, and any related expenses, on Form 1040, Schedule C, Profit or Loss from Business, or you may qualify to use Form 1040, Schedule C-EZ, TO determine your Net Profit from Business. You will also need to use Form 1040, Schedule SE, Self-Employment Tax to compute and report your social security and Medicare tax.

For instructions and forms go to the IRS gov website and use the search box for publication 334 a very good place to start with examples.

Publication 463 Travel, Entertainment, Gift, and Car Expenses

Use the search box at the IRS gov website for Small Business and Self-Employed Tax Center

Filing Season Central is your one stop assistance center for filing your business returns. This includes Highlights of Tax Law Changes, Tax Tips, and more.

2 of the seven tax tips for starting a business enclosed below.

#4 Good records will help you ensure successful operation of your new business. You may choose any record keeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.

#7 Visit the Business section of the IRS gov website for resources to assist entrepreneurs with starting and operating a new business. Go to the IRS gov website and use the search box for the below referenced material

*Starting A Business

*Operating A Business

*Closing A Business

*Publication 4591, Small Business Federal Tax Responsibilities (PDF 470.1K)