Comments on: Ask the taxgirl: 1099-MISC http://www.taxgirl.com/ask-the-taxgirl-1099-misc/ tax news, tax info and tax policy Sun, 23 Nov 2008 11:58:20 +0000 http://wordpress.org/?v=2.6.2 By: Ask the taxgirl: One time gains http://www.taxgirl.com/ask-the-taxgirl-1099-misc/#comment-3656 Ask the taxgirl: One time gains Mon, 09 Jun 2008 15:27:34 +0000 http://www.taxgirl.com/ask-the-taxgirl-1099-misc/#comment-3656 [...] 1, The short answer is that you shouldn’t be penalized for not making estimated payments if you did not have a tax liability last year. For information about the safe harbor rules, you can check out my prior post on estimated payments. [...] [...] 1, The short answer is that you shouldn’t be penalized for not making estimated payments if you did not have a tax liability last year. For information about the safe harbor rules, you can check out my prior post on estimated payments. [...]

]]> By: Ask the Taxgirl: Reporting 1099-MISC Income http://www.taxgirl.com/ask-the-taxgirl-1099-misc/#comment-3655 Ask the Taxgirl: Reporting 1099-MISC Income Sat, 26 Jan 2008 20:18:11 +0000 http://www.taxgirl.com/ask-the-taxgirl-1099-misc/#comment-3655 [...] basic information about 1099-MISC income and related deductions income earned with affiliates and advertisers when to make estimated payments due to income with no withholding [...] [...] basic information about 1099-MISC income and related deductions income earned with affiliates and advertisers when to make estimated payments due to income with no withholding [...]

]]> By: Forget Franchising… Become a College Football Coach! http://www.taxgirl.com/ask-the-taxgirl-1099-misc/#comment-3654 Forget Franchising… Become a College Football Coach! Thu, 29 Nov 2007 22:28:56 +0000 http://www.taxgirl.com/ask-the-taxgirl-1099-misc/#comment-3654 [...] Ask the taxgirl: 1099-MISC [...] [...] Ask the taxgirl: 1099-MISC [...]

]]> By: Robert D Flach http://www.taxgirl.com/ask-the-taxgirl-1099-misc/#comment-3652 Robert D Flach Thu, 29 Nov 2007 12:59:06 +0000 http://www.taxgirl.com/ask-the-taxgirl-1099-misc/#comment-3652 The taxpayer should make a payment by January 15, 2008 – the due date of the 4th quarter payment. As you say, this will reduce the penalty somewhat. He/she may want to make the state payment in December to be able to claim it as an itemized deduction for 2007 The taxpayer may be able to reduce the penalty for underpayment of estimated tax by “annualizing” her 2007 income. This will work if her income was not received evenly during the year – but more income was earned as the year progressed, and a higher income can be applied to the last two quarters than to the first two. This is a complicated calculation and the taxpayer should consult a tax professional. I do agree that for 2008 the taxpayer should use the 2007 actual tax liability as a guide for making the quarterly payments. The Wandering Tax Pro The taxpayer should make a payment by January 15, 2008 – the due date of the 4th quarter payment. As you say, this will reduce the penalty somewhat. He/she may want to make the state payment in December to be able to claim it as an itemized deduction for 2007

The taxpayer may be able to reduce the penalty for underpayment of estimated tax by “annualizing” her 2007 income. This will work if her income was not received evenly during the year – but more income was earned as the year progressed, and a higher income can be applied to the last two quarters than to the first two.

This is a complicated calculation and the taxpayer should consult a tax professional.

I do agree that for 2008 the taxpayer should use the 2007 actual tax liability as a guide for making the quarterly payments.

The Wandering Tax Pro

]]> By: Sharon http://www.taxgirl.com/ask-the-taxgirl-1099-misc/#comment-3653 Sharon Thu, 29 Nov 2007 02:49:32 +0000 http://www.taxgirl.com/ask-the-taxgirl-1099-misc/#comment-3653 The safest method of paying enough estimated tax and withholding, and thereby avoiding underpayment penalties, is to use last year's tax to make any current calculations. Since this is the first year for the 1099 income, that would be hard to estimate. Especially considering that you should have expenses to offset some of the income. Another factor to consider is that self employment tax (social security) will need to be calculated on the profit or loss from the Schedule C (1099 income) on top of any tax that is due from the income. If you have enough deductions to reduce the profit, then your total liability could be minimal. Babyboomer11852.wordpress.com The safest method of paying enough estimated tax and withholding, and thereby avoiding underpayment penalties, is to use last year’s tax to make any current calculations. Since this is the first year for the 1099 income, that would be hard to estimate. Especially considering that you should have expenses to offset some of the income.

Another factor to consider is that self employment tax (social security) will need to be calculated on the profit or loss from the Schedule C (1099 income) on top of any tax that is due from the income.

If you have enough deductions to reduce the profit, then your total liability could be minimal.

Babyboomer11852.wordpress.com

]]>