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Thread: Get Your Taxes Won

  1. #41
    Quote Originally Posted by Sabo View Post
    Sure, but you'd still want to file to rebut erroneous presumptions from other entities, no? Sadly, it's difficult to find a payer that doesn't blindly follow the status quo. Not sure how you folks are able to get out in front of that.
    You speak of the reporting by employers (including clients)?

  2. #42
    Senior Member
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    Quote Originally Posted by Sabo View Post
    Sure, but you'd still want to file to rebut erroneous presumptions from other entities, no?
    Yes, that's another reason to file. Up to you. Let's say you made $100k last year, off the books as they say, with no reporting except for a single 1099-MISC alleging $7k in Box 7 "Nonemployee compensation." The rules say you're required to file as the $12,000 (Single) filing threshold does not apply to self employment income. You would not owe any income tax, because your income is below $12,000. But you'd be on the hook for social security and medicare ("FICA") tax due on your "self-employment" earnings. The self employed pay FICA as "Self Employment Tax" (SET). SET is calculated on schedule (form) SE and is filed as part of an income return.

    But what if you're redeeming lawful money and don't agree that $7k was "self-employment" or "Nonemployee compensation"? Filing a return is your chance to rebut that allegation.

    Disclaimer: not tax advice

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