Schedule C Reporting

Posted by zendfreak2003 on January 10, 2009, 2:21 pm

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I started doing freelance work on the side and will have to start
doing Schedule Cs. I am also employed by a company and receives W-2
yearly. When estimating my estimated taxes, do I just have to estimate
the amount I will make on the side freelancing since those are 1099s?
Or do I have to estimate how much I will make through both my job and
freelancing?

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Posted by Arthur Kamlet on January 10, 2009, 2:48 pm

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>I started doing freelance work on the side and will have to start

>doing Schedule Cs. I am also employed by a company and receives W-2

>yearly. When estimating my estimated taxes, do I just have to estimate

>the amount I will make on the side freelancing since those are 1099s?

>Or do I have to estimate how much I will make through both my job and

>freelancing?

You end up filing one Form 1040, which has all your income and
expenses and taxes on it. So you want to estimate income and
taxes based on all this.

See IRS Publication 505 and the instructions for 2009 Form 1040ES.
You will not only pay income tax on your self employment, but if you
make a nice profit, you pay self employment taxes as well.

Schedule C is where you report your self employment income and expenses,
and Schedule SE is where you calculate self employment tax.
--

ArtKamlet at a o l dot c o m Columbus OH K2PZH

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
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Posted by Phil Marti on January 10, 2009, 3:26 pm

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>I started doing freelance work on the side and will have to start

> doing Schedule Cs. I am also employed by a company and receives W-2

> yearly. When estimating my estimated taxes, do I just have to estimate

> the amount I will make on the side freelancing since those are 1099s?

> Or do I have to estimate how much I will make through both my job and

> freelancing?

It's sort of a combination since, as has already been pointed out,
everything lumps together when you file your return.

I'm in a similar situation with my pension and a small amount of freelance
income. Since I've elected not to have taxes withheld, I base my monthly
set aside for taxes, the equivalent of your W-4 calculations, on solely the
pension. When I receive side income I put 40% of it into my tax holding
budget category to cover income (all at the marginal rate) and
self-employment tax.

If your income will be higher this year than last, the easiest way to deal
with estimated tax is to base it on last year's tax, as explained in
Publication 505. If income will be less, you can use the annualized income
method for calculating your payments.
--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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