The high cost of earning little?
March 14, 2009 10:41 PM Subscribe
Am I really paying $1,000 in taxes to freelance?
posted by evil holiday magic to work & money (22 answers total) 15 users marked this as a favorite
I'm doing my taxes online, at FreeTaxUSA, which shows me a running total of my balance/refund as I submit new forms. My return contains two forms: a W2 from my main employer, and a 1099-MISC from an organization I've done some contract work for.
As I submitted the W2 and the 1099-MISC, and applied the standard deduction, my federal refund was ~$750 and my state (CA) was $150.
Finally, I was told by the site to attach the 1099-MISC to a Schedule C; most of which is blank, as I'm not a business owner. As soon as I did this, my federal refund became a friggin' $50 balance! My state refund dropped to $0!
My freelance work amounted to about $3,000 for a non-profit. Can this be correct? And does this mean I'm paying almost $1,000 for the "privilege" of doing freelance work?