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Question about 1099-MISC - zippy

Posted: Apr 10, 2012

I need to know if MTs filing as ICs can claim dependents for the child tax credit and what, if any, forms I need in addition to the 1099-MISC form they sent me.  One person is telling me that ICs can get the child tax credit, another is telling me that they can't, and there is nowhere on the forms that I have to put anything down for dependents.  I have tried calling the IRS, but was put on hold and couldn't wait long because it wasn't my phone and I have sent two emails.  It's getting close to tax day and I still have not heard back from the IRS.

not sure I understand the question - Ayn

[ In Reply To ..]
1099 is just the form from your employer. True, it is not the same as a W-2 in that there is no place to claim dependents. However, you claim dependents for the child tax credit on your tax forms (1040) anyway, regardless of your 1099 or W-2.

You can claim any dependents that meet the definition of a dependent, regardless of your employeement status -- regular employee or IC.

1099 - alias

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you cannot claim dependents on the 1099 throughout the year, as you can on a W2, as they are not withholding any taxes for you. You file the dependents at the end of the year when you file your 1040 tax return. The 1099 is just a statement of what you earned over the year, not a withholding tax form.

Agree and ... - sm

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Thinking you cannot afford a paid tax preparer is unwise. If you cannot figure out the dependent tax credit, what else are you missing????

Are you claiming all you can for business use of your home??? Rent or mortgage, utilities, internet, phone, repairs and maintenance, landscaping, insurance? I take a portion of every toilet part and tube of caulk! It adds up. How about office supplies, computer stuff, bookshelves, references, continuing education for credential upkeep, and furniture? Mileage to client offices, Office Depot, Home Depot, post office, etc. Postage and shipping. This can be thousands evey year!

You do not need to rush this for April 17. Simply file an extension of time to file, then find help. You do need to estimate what you owe, if anything, and pay it with the extension, but you can get it back.

There are often low or no cost preparers at libraries, senior centers, recreation or community centers, etc. I pat 125 a year but save far more, and I never have to worry about whether I did it right.

sm - zippy

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I had to have someone buy all that for me and they wouldn't give me the receipts. They are putting that on their taxes because they have a home business of a different kind. I do not think that I cannot afford paid tax preparation. I know for a fact. I can barely survive on what I make and have no other form of income coming in. I am having to stay with the people that provided my office equipment right now, so there are no bills that I can put on my taxes. Thank you for the information though.

1099 - emo

[ In Reply To ..]
One doesn't have anything to do with the other.

If you have 1099 earnings, you got them because you ran a business. So you will need to file your taxes as if you ran a business.

The child tax credit is addressed on the 1040, if I remember right.

My advice would be, since it sounds like you are unsure of what you are doing, to get a tax professional to help you.

The thing is I can't afford that. - zippy

[ In Reply To ..]
I have already been down that road trying to get someone to do my taxes for me. So far all the people who have said they would file my taxes want their money up front and I just don't make enough to pay someone to file them for me. When I sent for the forms from the IRS, I specified that I would need the forms to claim dependents as well as the ones to report income. All they sent was the 1096 and the 1099-MISC.

Spend $100 and get a Home Business version of - Turbo Tax

[ In Reply To ..]
It's a deductible expense. You cannot, repeat CANNOT just "figure this out" on your own if you don't even have some basic tax education.

Turbo tax will walk you through the steps and get your schedule C done mostly correctly. If you are going to continue being a contractor, though, if you can't take the time to do some education on taxes, you need to have someone do them for you - it's a deductible expense, so it's well worth it.

Have you been either paying quarterly taxes or putting money aside for the tax bill that is going to be due next week?
sm - zippy
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At this time, doing it on my own is my only option. To top it off I have dyscalculia and the only way I am able to deal with numbers is when I hear them I am able to type them. I did not make enough to put money back for taxes. I am barely able to survive on what I am making and don't have any income coming in from other sources. The only reason I even took an IC position is being unemployed for over two years and this is the first place that offered me a job so I took it because I have a little boy to take care of.

The IRS has volunteers who help with taxes - alana

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Most forms can be picked up at public libraries and post offices.
The IRS has been no help. - zippy
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I have not received any replies back from them and just sent another email.

You can't afford not to - emo

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If you are going to be in business, then you have to be a smart business person. Refusing to get a professional to do your taxes is just plain irresponsible, especially given that from the sound of your posts, you have no clue whatsoever.

I can't even recommend Turbo Tax to you because it just doesn't sound like you have a handle regarding the taxes. While TT is easy to use, you still have to know what's what as far as your paperwork is concerned.

The IRS does give free help, but you have to file as a sole proprietor and individual and I'm not so sure they will hold your hand through all of that. They might, doesn't hurt to try.

I tried Turbo Tax. sm - zippy
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They kept telling me that I would have to pay for the correct form. The only reason I took the job as an IC is because I was unemployed for two years and had a little boy to take care of. This was the first place that offered me a job and I took it because my son has to eat. I cannot afford to pay money to find out how much more I have to pay. I don't have another income coming in and can barely survive on what I make now.
Call the closest Communitiy Action Office - They will direct you to a person
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You should find them in the phone book--perhaps under social services. They have volunteers who will help you fill out the forms.
Thank you. I will do that. nm - zippy
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Professional saves money - sm

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As an IC you may be eligible for many deductions so you won't even need to pay any tax, and a professional (volunteer or paid) will help you get the credits you should get. If you rent, you can probably deduct part of your rent--homeowners can deduct a portion of lights, heat, garbage pick up, mortgage interest, insurance costs, computer, office equipment, supplies etc., internet/phone cost, etc. Also, by filing it will keep you out of jail.

LOL you won't go to jail - don't let this person scare you - sm

[ In Reply To ..]
They will just file them for you and then go after you for the money. They will work with you 150% to make it so you can afford to pay your taxes. Also, if they file for you, you can always file them yourself which will guarantee a lower tax or no tax than what they come up with. They filed a year for me and they said I owed $24k!! Turned out after I filed, they owed me $1,500! There is also an IRS Advocates office available for problems if you get an IRS revenue officer who thinks they are God and pulls shenanigans. And yes, this happens and yes, the advocate really works.

Jail unlikely--Friends Dad spent 6 month in slammer - Tax Evasion

[ In Reply To ..]
Not the chairman of Enron, either. It is better to file the forms and extensions than to risk fines or worse.
Somehow I think there's more to the story. - me
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People who commit manslaughter don't get six months in prison.

I know someone that hasn't filed in years. - zippy

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She hasn't ever gone to jail. She hasn't filed in nearly 15 years. I just want to have everything in order. Thank you. I will keep the IRS Advocates office in mind for sure.
It is only $25,000 fine and a year in jail per year - No worries
[ In Reply To ..]

Crimes With Which You Can Be Charged

If the CID recommends prosecution, it will turn its evidence over to the Justice Department to decide the special charges. Individuals are typically charged with one or more of three crimes: tax evasion, filing a false return, or not filing a tax return.

Tax evasion or fraud. Tax evasion is defined as “intentional conduct to defeat the income tax laws.” Any sort of tax scheme to cheat the government can fall into this broad category. Tax evasion is a felony, the most serious type of crime. The maximum prison sentence is five years; the maximum fine is $100,000. (Internal Revenue Code § 7201.)

Filing a false return. Filing a false return is what it sounds like. Your tax return contained a material misstatement, such as describing your line of work as bricklaying when you are a bookie. More people are charged with filing a false return than with tax evasion because in a filing-a-false-return case, the government does not have to prove an intent to evade the income tax laws—only an intent to file a false return. Filing a false return is a less serious felony than tax evasion that carries a maximum prison term of three years and a maximum fine of $100,000. (Internal Revenue Code § 7206 (1).)

Failure to file a tax return. Not filing a return is the least serious tax crime. It’s defined as intentionally failing to file a return when you were obligated to do so. Not everyone must file tax returns. For example, only those people earning above a specified amount must file. The minimum changes from year to year. Not filing a tax return is a misdemeanor. The maximum prison sentence is one year in jail and/or a fine of $25,000 for each year not filed.

Go for it. I guess shoplifting can be quite lucrative too.
Quit trying to scare the OP sheesh! - sm
[ In Reply To ..]
They are not going to go after you, me or the OP - or anyone on this Board and throw them in jail. I'm telling you we aren't big enough fish. This law is only used against people who are hiding things and failing to pay large sums of taxes owed. Call the IRS and ask for crying out loud - they will tell you the same thing - just file your taxes LOL. WOW some people's kids hahaha!

OP, just do what has been suggested and you'll be fine. Apply for the extension - you'll be granted it immediately. Don't worry about paying any taxes now - how can you, you don't know what they're going to be. Put $0 on what you think you owe. You will NOT get in trouble if it turns out you do owe when the time comes. I promise I would not lead you down the wrong hysterical road :)
Just the facts - sm
[ In Reply To ..]
I suggested filing the extension (Sheesh!) That shows an intent to comply with the law and you will be able to sleep at night without worrying. 15 years of not filing is definitely cheating all other taxpayers. Do you know how much that person may have cheated the government? Not trying to "scare" anyone, just letting them know the facts.
Thank you for the positive advice. nm - zippy
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I know someone who hasn't filed in 12+ years and has now fled the country. (nm) - just me
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Also file an extension right away - sm

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It gives you until October to file your taxes. It really isn't a difficult thing to do. It seems overwhelming, but it's really not. I suck at math and figures, and throw all of my receipts into a plastic shopping bag (no organization) so if I can do it, you can do it :)

You'll need a Federal Form 1040, Schedule C (Profit & Loss Form), Schedule SE (Self-Employment Tax) Form, and try for the EIC (Earned Income Credit). Where I live, we don't have State Income Tax, so I can't help you there.

All of the necessary forms and instructions are downloadable from here:


This is where I file my extension at and the program I have used for my daughter's taxes - and it's FREE for Federal returns:


I have not paid taxes in many years. You only have to pay quarterly taxes if you paid taxes the prior year - hence why I don't have to pay those either. And yes, I've been audited :)

Good luck to you and hope this helps! Cheers!

Thank you so much! I will definitely be doing that. - zippy

[ In Reply To ..]

The extension only gives you time to do the paperwork - if you owe money, you still owe it now

[ In Reply To ..]
If you owe money, and it sounds like the OP will (been there, done that, unfortunately) you can make a payment plan with the IRS, but you will still end up with penalties and interest owed.

OP - you don't have to pay for any forms. Go to www.irs.gov and you can download any form you need, but you have to know what form you need.

Do you have a community college in your area? Many times they have a program that they set up with the accounting students to do people's taxes. It's something to look into.

I don't mean this next statement in a mean way, so please don't take it as such, but for the love of God, educate yourself. If you are going to continue to be an IC, if you don't hold back for taxes and you don't have any idea of what forms to file, you are going to be in a world of hurt.

The education can take the form of reading - again, there are tons of resources available at www.irs.gov. There are almost always classes and seminars that are available somewhere and many times those are free. You have to do some work on this for yourself so you don't end up paying more than you need to and so you don't end up with penalties and interest that could be avoided.

Thank you for the suggestions. - zippy

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Don't worry about paying anything with your extension - just file the paperwork now
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They aren't going to fine you or come through you in jail LOL. They can't make you pay something if you have no idea if you owe or not!

Go to a USPS and get a booklet for whatever - sm - Zorro

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form you use or go online to the irs website. I am sure there is a worksheet or instructions for the credit. I believe it is based on income whether or not you are eligible. I know we get some sort of credit for $1K for each child, just looked at my 2010 taxes, it is the Child tax credit. I don't think it matters if you are an IC or not, this has nothing to do with how you make your living either as an employee or an IC. I have two jobs and am both.

So I would just go to the website and google Child tax credit, and it should give you all the answers you need.

Thank you! nm - zippy

[ In Reply To ..]

tax program - done

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I used taxact.com for free doing my 1040, schedule C and had no problem. They walk you through it. Unlike Turbo Tax where they say it's free, I went through the whole thing and they tried to charge at the end. If you go to the IRS site, you can also search for free programs.

Yes. That is what happened with Turbo Tax. - zippy

[ In Reply To ..]
I filled out everything. It went to the screen where it said it was processing my return and then a screen popped up saying that they were unable to file it as is and I would need to pay for another form. I will try taxact.com. Thank you so much for the suggestion!

I agree with the poster above that the very - first step is to file

[ In Reply To ..]
an extension immediately. You can do your taxes on your own, but it can be difficult. I did one year and was ready to pull my hair out, and I would consider myself pretty good at math. There are so many things you need to be getting together. If you have a devoted home office, there are a lot of deductions you can count, but you will have to gather all of your information to do that, figure out your sq footage for that room, % of your home that takes up, utility bills, internet, mortgage, if you bought any supplies, computer, etc.

I will be doing my taxes soon, and I am going to use H&R Block online. I did last year, too. It is 75. If you file an extension, you would have a few months to come up with 75. It would be well worth your time and money to try an online program to file.

Thank you for the suggestion. :) nm - zippy

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Zippy - sm

[ In Reply To ..]
Zippy, I know how it is not to make enough money. If you go to H&R Block they will prepare your taxes for you and take the money owed out of your refund. You should qualify for a refund as long as you had some income the previous year. You may qualify for earned income and get a child tax credit. I have not made a lot of money and I get these credits. I don't have to pay quarterly taxes as I know my earned income credit will cover that as I do not have to pay at the end of the year and always get a refund. Jackson Hewitt will also prepare tax refund and take it out of your refund and do not have to pay upfront.

Thank you for the suggestion. :) nm - zippy

[ In Reply To ..]

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