Is there a form coming?

January 27, 2007 10:00 AM

Self Employed Tax Question: I worked as a freelance carpenter for half of '05. Should I be looking for a form from the place(s) that I worked for in the mail? Or do I need to crack out my bank statements and a calculator? (I'm in Chicago, if that makes any difference)
posted by schwap23 to work & money (6 comments total)

If you worked for a business, it's likely they'll send you a 1099.
posted by trevyn at 10:05 AM on January 27, 2007

If you were working as an independent contractor, you won't receive a W-2 from your customers, no.

As an independent contractor, you're likely additionally responsible for paying the self-employment tax (schedule SE) and for reporting your business expenses (schedule C).

The IRS a lot of information for self-employed people, but if it isn't making sense, it's better to pay for an accountant than to risk misfiling.
posted by Mr. President Dr. Steve Elvis America at 10:15 AM on January 27, 2007

Ooops! I meant 2006, not 2005...
posted by schwap23 at 10:15 AM on January 27, 2007

Also, trevyn is right about the 1099, but businesses are only required to submit a 1099 if they paid you more than a certain amount.
posted by Mr. President Dr. Steve Elvis America at 10:28 AM on January 27, 2007

And, well, sometimes businesses don't send you a 1099 even if they're supposed to. In that case, you still have to pay tax on it.
posted by kindall at 10:36 AM on January 27, 2007

Anyone who paid you $600 or more as an independent contractor is required to send you a Form 1099 by the end of January. You will be required to fill out a Schedule C for income tax and self-employment social security and medicare tax.

On your Schedule C you can deduct any expenses you incurred as a contractor such as tools, work clothes, truck, health insurance premiums, etc. If you have a shop at home, you can also deduct those expenses. These deductions are critical in reducing your taxes since, as a self-employed person, you are paying 15% for self-employment tax on top of income tax. (One-half of that 15% can also be deducted on your Form 1040.)

Turbotax Home & Business does a pretty good job of walking you through the Schedule C. You might find it useful to go to a tax preparer the first time through to make sure you get all of the proper deductions. In following years you should be able to do it yourself using Turbotax.
posted by JackFlash at 11:20 AM on January 27, 2007