“This year I earned about 75,000 selling used trucks for a local used truck dealer. That said, I've NOT paid any taxes in as I'm considered a "sub contractor" and my employer dosen't with hold taxes from my pay checks.”---->As a sub-contractor, a SC , who receives 1099MISC Form,(as long as your ER, the main contractor, has subcontracted work to you, a SC, and paid you more than $600, your ER has to send you, as well as the IRS, a 1099-MISC form(both 1099MISC and 1096 to the IRS). Then you MUST file your return by filing on Sch C and Sch SE(for your SECA taxes, Soc. Sec taxes for a self employer). I fyour business is incorporated as C corp or S corp , then your ER doesn’t send you 1099MISC, but he needs to send you his check(a Form 1099 is not utilized if the services are being provided by you, as a corporation (and, by extension, a limited liability company or LLC). As long as you set up your own corporation or LLC elected to be taxed as either C Corp or S Corp, I guess, through which you transact business. If that is the case, the presumption is that a Form 1099 is not utilized to report payments to you provided the payments are made to and in the name of the legal entity.)So, I should say that as long as the amount on Sch C of 1040 line 29 or 31 is $400 or exceeds $400, you MSUT file Sch C and as long as the amount on Sch SE of 1040 line 4 is ALSO $400 or exceeds $400, you must pay SECA taxes on 1040ES; as you are filing as a sole proprietor, partner, S corporation shareholder, and/or a self-employed individual, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.However, you do not have to pay estimated tax for the current year if you meet all three of the following conditions:you had no tax liability for the prior year :you were a U.S. citizen or resident for the whole year :your prior tax year covered a 12 month period. The 2010 Tax Relief Act reduced the self-employment tax by 2% for self-employment income earned in calendar year 2011. The self-employment tax rate for self-employment income earned in calendar year 2011 is 13.3% (10.4% for Social Security and 2.9% for Medicare). For self-employment income earned in 2010, the self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).
Please visit the IRS Websites here:
Estimated Taxes Self-Employment Tax (Social Security and Medicare Taxes)
“My wife works and has earned about 25k and she IS w4 but because she earns so little there really isn't anything witheld from her pay either.”--->I guess it depends on withholding allowances number on her W4.As she claims more W/A, her federal/ state withholding tax liability can be zero. However, her Social Security taxes have to be taken from the gross income;the total income without all other deductions.
“Question: Is there anything I can do this late in the year to protect myself from a hugh tax burden? “---->As said above, as you are filing as a sole proprietor and/or a self-employed individual, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.If you are filing as a corporation , S corp or reg C corp, then you generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return.You need to make quarterly basis estimated taxes to both IRS and to your state; 5.Estimated tax payments are due by April 15th, June 15th, September 15th, and January 15th.You need to pay them on 1040ES. If you expect your income to increase or to decrease significantly, you may want to calculate your estimated taxes using your projected total income. As you file your eturn as MFJ filer, I guess, with your spouse and your spouse ‘s federal/state withholding taxes are zero, then you MAY have to increae your estiamteds taxes on 1040 due to increase in your taxable income( as your spouse salary is added to your gross income AGI/ Taxable income.
“Since I'm a 1099er and can't take milage expences as say a traveling sales-man could, what other deductions, expences or investments can I consider when I prepare my taxes?”---->I am not quite sure what your personal situation is;however, a self-employer can claim a deduction for miles driven to a job assignment. The starting point must be a home, an office or a job location, and the destination must also be a home, an office or a job location. You cannot deduct miles driven for other reasons even if you drove the same vehicle. The IRS allows self-employed contractors to receive a tax deduction for business miles. The IRS sets the reimbursement rate each year and sometimes adjusts the rate after the first six months of the year. A self-employer has the option of deducting actual expenses. This option provides benefits if the taxpayer spent more on traveling than the federal reimbursement rate provides. Actual vehicle expenses include the actual cost for fuel, maintenance costs, oil change costs, the cost of new tires, vehicle registration fees, vehicle loan interest, vehicle insurance, lease payments, vehicle depreciation and toll booth and parking fees. Vehicle loan interest, toll and parking fees and registration fees also can be deducted by those who opt for the standard mileage rate.You need to check on this with your tax practitioner,OK???
“B.T.W., I'm aware of the "tax free" investments like IRA's, bonds etc. So please just advise of tax reducing vehicles in my area of concern.”---->As long as you pay your selfemployment tax on Sch SE, then 50% of your SE taxes paid to the IRS can be deductible on 1040 line 27 on your federal return.ALSO, one hundred percent of the cost of medical insurance premiums,i.e. health savings account or etc, are deductible for you, as a self-employed worker, and your dependents, unless your spouse is covered under a subsidized employment plan on Form 1040, Line 29;whether or not you itemize deductions. For Sole Proprietors, this deduction is limited to your Schedule C profit minus the deductions for Self-Employment tax and Retirement Plans (like a Keogh, SEP or SIMPLE Plan).So you must have been profitable to take this deduction, and your profit (less the deductions mentioned above) must be greater than your health insurance premium in order for you to get the entire deduction.
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