[Rumor]

I begin a job next month that will require me to file a 1099. Here are some questions:

What is considered a business expense (car, business lunches, office supplies)?

What happens if I am injured while working? Since I am self employed, I do not have WC benefits.

How much should I put aside for taxes?

If it helps any, I am single, no dependents (cats don't count I'm told ) and within the $45k - $60 income range. I live in California. I'm also a full time student in my Freshman year.

[MacosNerd]

You'll probably be better off asking a tax accountant as each state has their own requirements and people here will be posting from their perspectives. You'll probably want a definitive answer from someone who's worked in tax law versus a bunch of nerds on a board

[Rumor]

I can't afford a CPA at the moment (that's why I'm getting a new job). These are pretty general questions and the Federal 1099 taxes shouldn't change much from state to state.

[design219]

I'd agree with getting pro advice, don't screw around with taxes when you are self employed.

By the way, way to go on making that income while going to school.

[Rumor]

Thanks.

[MacosNerd]

Originally Posted by Rumor 

I can't afford a CPA at the moment (that's why I'm getting a new job). These are pretty general questions and the Federal 1099 taxes shouldn't change much from state to state.

No but Withholding, Reporting, paying Workers Comp insurance does vary from state to state.

[Rumor]

Very, very true.

Any thoughts on what kind of receipts I should be keeping? I'm also curious if my car can be considered a business expense, whether I should use mileage or gas purchases.

[ghporter]

Originally Posted by Rumor 

Very, very true.

Any thoughts on what kind of receipts I should be keeping? I'm also curious if my car can be considered a business expense, whether I should use mileage or gas purchases.

Keep everything, and keep it organized. Calculate your actual costs for gas and upkeep, as well as miles and then figure which one gives you the better picture of vehicle use, keeping in mind that if you go by mileage, you have to use the IRS's mileage rate (something like 35¢ last time I checked).

You don't need a "tax accountant" or CPA to figure out how to start. Just a tax adviser that knows business tax. You can probably also deduct the cost of his services.

[BadKosh]

Keep ALL travel receipts.
Keep all receipts that relate to stuff you had to have for doing your job.
Keep track of all miles driven to and from work.
Keep track of all hours, and a list of stuff you did each day.

[Rumor]

Keep track of hours? Why is that?

[BadKosh]

In case their is a disagreement of how many hours you worked.

[Rumor]

Who is there to disagree with? The IRS? Do they care how many hours I worked as long as they get their plunder?

[ghporter]

Actually you want to keep track of how much time is spent on what tasks for billing purposes as well as establishing a deduction for the part of your home you (might) use as an office.

[mduell]

Originally Posted by Rumor 

How much should I put aside for taxes?

If it helps any, I am single, no dependents (cats don't count I'm told ) and within the $45k - $60 income range. I live in California. I'm also a full time student in my Freshman year.

I am not an accountant. This is not tax advice.

Grossing $50k/yr after biz expenses, standard deduction/exemption plus the education credit, puts you at about 4k for social security/medicare, 2.5k in state taxes, and 5k in fed taxes for a total of 11.5k/year (27% average total tax rate, 42% marginal tax rate).

Originally Posted by ghporter 

Keep everything, and keep it organized. Calculate your actual costs for gas and upkeep, as well as miles and then figure which one gives you the better picture of vehicle use, keeping in mind that if you go by mileage, you have to use the IRS's mileage rate (something like 35¢ last time I checked).

48.5¢/mi this year.

[ghporter]

Originally Posted by mduell 

48.5¢/mi this year.

That's a big jump! I'm surprised.

[mduell]

It was 44.5 last year and 40.5 for most of 2005... I take it you haven't been driving for business in a while.

[SVass]

Forms and Instructions

Download the instructions and the form. Read them for yourself and see what goes in each part of the form. sam

[ghporter]

Originally Posted by mduell 

It was 44.5 last year and 40.5 for most of 2005... I take it you haven't been driving for business in a while.

Quite correct. I stopped looking at it in 2004 some time, when I no longer got reimbursed (at the IRS rate) for using my car on the job.