Taxes are considered to be one fact in life that you simply cannot deny. It’s actually something that you cannot avoid. When you are a self-employed individual, it’s actually your obligation to make sure that your credit responsibilities are all in check. Because you are a 1099-MISC income earner, it’s a requirement to show proof of income for our taxation laws, insurance purposes as well as for loans. When you are a freelancer, the 1099-MISC Taxes which you pay will go to Social Security and also in Medicare. In case you are wondering as to what is a 1099-MISC form which you have obtained, below would be some things that you should know about it.
All self-employed individuals are known to as the 1099-MISC income earners are required to pay tax during each quarter to the IRS. In every January, you will be receiving a 1099-MISC form in the mail from each of the company that you worked for in the previous years. If you ever have worked for more than one company in a year, you will also be getting multiple 1099 MISC forms.
In every form, you will see a certain amount in Box 7, which actually is the overall amount which were remunerated by an employer, which means that you will have to pay tax on this amount. You have to take note that it is your responsibility on staying on top of your credit responsibilities when you ever fail in the income bracket.
When filling a form, the company which you have worked for throughout the entire year will do the total of your earnings on each of the 1099 MISC form. This is actually why it is important that you will also collect and track your earnings. For more facts about taxes, visit this website at http://www.dictionary.com/browse/taxation.
How to Calculate your Tax in a 1099-MISC Income
Total your income amounts on the 1099 MISC form that you have and if ever you have more than one form, combine the total income on all of the forms. Learn more on how to Calculate 1099-MISC Taxes.
Total the business expenditures that you also have kept track of and then subtract it from the total income you have because this will bring you to your net income.
Multiply on the net income amount by 0.9235 in order for you to end up with your taxable income.
You should check the IRS tax table for the amount of tax which you owe on your taxable income. You should bear in mind that tax schedule will actually vary from each state.
You can actually now submit your 1099 MISC form electronically and payments need to be made by 8pm before January 31.