I just finished my taxes for 2007 and I have a few tips for anyone that owes on any 1099-MISC income (google, clickbank, etc) First of all...... don't think you can just not report your earnings because most major companies like google and clickbank report your earnings to the IRS anyway. So you owe the IRS money right? When I reported my earings for 2007 on turbo tax it said I owed about $5,300, and that was after I put in my W-2 for my day job. So I was pretty bummed. But that was using Turbo Tax Basic. But when I upgraded to TurboTax Home and Business edition it automatically switched all my information over for me. Then I went through business expenses and found a whole bunch of write-offs. For example, last year I bought two laptops, and a computer desk with chair. I used it for business so I took the writeoff. I also wrote off all my trips I took last year under business expense. After everything i'll be getting a refund. But make sure you have reciepts or you can look it up on your bank statements like I did. I hope this helps any tax newbies who earned 1099 last year. P.S. - Turbo Tax Home and business are about $80 but its WELL WORTH IT!!
You're lucky - if you owed that much from 1099s and you didn't pay quarterly estimated tax during 2007, then you could probably have looked forward to a penalty and interest notice in a few months' time.
Yeah taxes confuse the heck out of me, dealing with all these rules and writeoffs and such. I recommend getting a bookkeeper and an accountant that specializes in self-employed clients. That's my move for next year! Thanks for the tips.
I thought you only have to file quarterly if you run your biz under a tax id? I did everything under my social.
Taxes are a pay-as-you-go system. So, if you have income that is not subject to withholding, ie: self-employment, then you need to pay quarterly estimated tax payments to the IRS if you will owe more than $1,000 at the end of the year. And technically, your social security number is your tax id number. Be careful with those deductions. Don't get too carried away. Especially the trips. Make sure the main purpose of the trip was business and that you document it properly. Remember, I am a tax professional, but it's not tax advice unless you pay for it!
I thought most people knew that already =)? You can write off other things too, such as hosting, technology costs, internet bills -- and depending on whether or not you have a dedicated office, the cost of that (or partial amount of house payment if its a dedicated room in your home). Just be very careful and don't write off way too much or you'll probably get an audit, and then it would've been better to just pay some taxes as the IRS will have their way with you basically. But if you have to pay a lot of taxes it makes sense to write off at least the fundamentals of a web business (hosting, etc).
Great tips, I wrote off web hosting and the internet bill. Web hosting alone beat Google since I do not use Adsense very much .
Nope, you still have to make the quarterly payments. And you will be charged interest dating back to when they were due (which is last April for 25% of it).
Basic rule on business deductions: Any ordinary and necessary expense is deductible... (I often tell clients that if the deduction can pass the "giggle test," it's probably deductible. So, a laptop you use 100% for your business? Deductible. But a trip to Orlando during your kids' spring break for "business"? No way...
I missed my 1099. Can any of you give me the google ID number from there. I need to fill out my taxes, and I am missing this number. If you have it, great, if not, can someone please tell me how to contact adsense support. Their website makes it tough to find an email address or phone number.
Wish I got this information sooner. I had to pay $3000 in taxes because of my online earning. Taxes are BS even the founding fathers of America werw against these taxes.
I think if you are in business, it would be prudent to have a tax accountant work with you to get them done. I can tell you that my guy has saved me ten of thousands of dollars with my income taxes because he knows his way around the system - and, by the way, it is all legal and aboveboard. Jim