1099 Contractor work / taxes (schedule c) / work from home help

[Ohemgee]

Short and simple. I'm working for a new company based out of country at home. They require me to work as a 1099 Independent Contractor. This is the first time I'll be declaring myself independent from my parents and I haven't had time to talk to my uncle (who is a CPA and will be helping me after with my taxes)

Few questions (i live in florida):

1. Since its a company out of the country, what exactly do I have to pay? I know I'm considered the employer and employee, does that mean I withdraw 15% off of my net income for taxes, and my full Social Security and medicare? Do I even need to pay for medicare? D:

2. I live at home with my parents still. Can I have my dad bill me an invoice monthly for water/power/phone (shared on a family plan)/internet for deductibles?

3. "Anything that helps the business" is a general statement for a deductible, I can do all of my work from a browser, would I get a tax break from an ipad 2? And food/gas/etc.

4. Since I'm out of country, recurring payments (skype minutes, dropbox storage, etc.) for work would also be covered?


I need a secretary now. Blonde or brunette?

[guartz]

duuude you are so effed, I don't know the details but your ass is gonna be sore.

[foopy]

blonde.

better yet, asian girl with blonde hair.

[blkswrdsmn]

OMG:

I am an accountant.

You will file a schedule C and attach that to your 1040 personal income tax return. You will list all income (or at least all income that was reported) as such, and take expenses against that income. It matters that you are a resident and citizen of America and as far as FICA (soc. sec. and medicare) you will file (if your net earnings are such) schedule SE which will account for FICA.

As far as home expenses: yes you can take them IF you actually pay for them, but not in full. You would take a percent based on the portion of the home space that you use for business (maybe something like 25% or so).

Yes, anything that you buy that you could attribute to accomplishing work you should keep a record of and use the cost as an expense. However, things like capital purchases of assets (such as a computer or iPad or desk) would likely be capitalized, which means that you would depreciate it over time.

Things like communications and computer expenses you can take as an expense, as long as you aren't reimbursed by your employer (that holds for any expense).

If you are married, get a brunette... should make her less jealous.

[Dolmen]

OMG:

I am an accountant.

You will file a schedule C and attach that to your 1040 personal income tax return. You will list all income (or at least all income that was reported) as such, and take expenses against that income. It matters that you are a resident and citizen of America and as far as FICA (soc. sec. and medicare) you will file (if your net earnings are such) schedule SE which will account for FICA.

As far as home expenses: yes you can take them IF you actually pay for them, but not in full. You would take a percent based on the portion of the home space that you use for business (maybe something like 25% or so).

Yes, anything that you buy that you could attribute to accomplishing work you should keep a record of and use the cost as an expense. However, things like capital purchases of assets (such as a computer or iPad or desk) would likely be capitalized, which means that you would depreciate it over time.

Things like communications and computer expenses you can take as an expense, as long as you aren't reimbursed by your employer (that holds for any expense).

If you are married, get a brunette... should make her less jealous.

As an accountant as well, I fully support what blkswrdsmn wrote. If you had to drive miles solely related to the work, make a log of those as well because you can deduct them. I was in the same situation years back when I was a 1099 network engineer, and your expenses will definitely help you in regard to tax liability. The general rule of thumb with withholding when you're a 1099 contractor is to save 15.3% (13.3% for 2011 because they took 2% off the employee side of FICA) to cover FICA and Medicare, and then X amount for Federal withholding. Living in Florida spares you state income tax, so no worries on that. You will also want to look into making quarterly estimate payments to avoid penalties from the IRS for underpayment of tax.