Easy Ways to Calculate your 1099-MISC Income Forms
One of the facts that’s present in life that you simply cannot deny are taxes. There’s definitely no way for you to avoid it. If you are ever self-employed, it is essential that you 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. If you are ever a freelancer, the taxes that you will pay will go towards the Social Security and Medicare. If ever you were given a 1099-MISC form, below would be the things that will help you know more about it.
All the self-employed individuals or known in other terms as the 1099-MISC income earners needs to pay tax for each quarter to the IRS. For every January, you will be receiving a 1099-MISC form in your mail from each company which you have worked in the previous year. If in case you have worked for more than one firm in a single year, the number of forms that you will get is equal to the company you have worked with in that year.
Each of these forms will reflect a certain amount in Box 7, which is the overall amount that you were remunerated by an employer, which means that you will need to pay tax on the amount specified. 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 in fact is the reason as to why it is very important that you also collect and track your earnings.
Doing the Calculations
Total your income amounts on each 1099 MISC form and when you have more than one form, consider combining the overall income from all of the forms.
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 for you to calculate on your taxable income.
Consider checking the IRS tax table on the amount of tax that you owe on your taxable income. Always bear in mind that tax schedule varies from each state.
You could now submit your 1099 MISC form electronically and take note that your payments need to be made by 8pm before January 31.