Question about 1099-misc
 

Hey there,

This may be a stupid question, but there is no problem filing a W-9 with a company (and in turn getting a 1099-misc at tax time) while on a green card, right? I seem to remember it's ok for "US persons" to fill out a W9 and then getting a 1099...

Somewhat related, If I remember, those on a H1b wouldn't be able to work as an independent contractor making them ineligible for a W-9 - right?

Re: Question about 1099-misc
 

As far as I know, that is correct.

Rene

Re: Question about 1099-misc
 

Thank you! Yeah as far as I understand, anyone with a green card can work, start a business, freelance, do contract work, and are free to be employed by anyone unless specified (such as a government job etc)

Please someone let me know if this is not correct :)

Re: Question about 1099-misc
 

You're correct.

Re: Question about 1099-misc
 

Right. H1b is for a single specific job, no other work is allowed.

Once you have the green card you can work as many jobs as you like. Just make sure you pay your employment tax as well as income tax if you are an independent contractor.

Re: Question about 1099-misc
 

That's a good point - I have always done a Schedule SE when required, however I learned today from the IRS that:

"You must pay SE tax if you had net earnings of $400 or more as a self-employed person." - http://www.irs.gov/pub/irs-pdf/i1040sse.pdf

I always assumed it was on everything, no matter what. Guess under $400 doesn't need the additional Schedule SE, but that income must be included on the 1040 anyway.

Thanks for the info, and having me learn a little more about self-employment tax!

Re: Question about 1099-misc
 

You should pay estimated quarterly taxes throughout the year so you don't end up with a big tax bill (and possibly penalties) at the end of the year. If you are a sole proprietor you'll have to pay employment tax on the net income from your business on top of income tax, capital gains tax etc.

Re: Question about 1099-misc
 

I'm curious about the scenario where you can't estimate your taxes as they'll be so variable.

Any wisdom?

Re: Question about 1099-misc
 

Estimate=educated guess:fingerscrossed:

Re: Question about 1099-misc
 

Yeah...but for example...your profit bounces between

0.00 year 1
200k Year 2
90k Year 3
230k Year 4

Hypothetically.

Re: Question about 1099-misc
 

I don't see a problem. If you estimate/earn zero for the first 3 quarters, then estimate zero for 4th, but inadvertently earn $200k, you just pay/ reserve the cash to pay the tax out of the earnings....

Re: Question about 1099-misc
 

If your work is variable you have to make adjustments throughout the year. I just stared a 4 month independent contracting job. I have no idea how much other work I'll get during the year, but I think I'll pay the full amount of the tax in April based on those 4 months. If I work some more I'll recalculate the tax owed and pay some more tax in June. If I don't work for the rest of the year I won't pay estimated taxes in Sept. or Dec. I just use an online tax estimator each quarter using my sole proprietor net income and the other income and gains from the previous year.


Or you could just follow the instructions here

Publication 505 (2014), Tax Withholding and Estimated Tax

Re: Question about 1099-misc
 

For the record, my self employed, sole proprietor husband never pays the quarterly tax. He chooses to pay the lump sum at tax time. He regularly earns about $30K a year, and the penalty is only a few dollars.

Rene

Re: Question about 1099-misc
 

That's good enough for me:)

Re: Question about 1099-misc
 

Generally, you will not have to pay a penalty for 2014 if any of the following apply.

• The total of your withholding and estimated tax payments was at least as much as your 2013 tax (or 110% of your 2013 tax if your AGI was more than $150,000, $75,000 if your 2014 filing status is married filing separately) and you paid all required estimated tax payments on time.
• The tax balance due on your 2014 return is no more than 10% of your total 2014 tax, and you paid all required estimated tax payments on time.
• Your total 2014 tax minus your withholding and refundable credits is less than $1,000.
• You did not have a tax liability for 2013 and your 2013 tax year was 12 months, or
• You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000.

Publication 17 (2014), Your Federal Income Tax