Filing income tax is an important part of your life and irrespective of whether you are doing it for the first time or need a refresher you need to get it done as soon as possible. If you are self-employed then you can use QuickBooks for filing your self employment taxes.
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Those who are self-employed most probably need to pay federal self-employment taxes. These taxes include your income, Medicare taxes, and Social Security for your self-employment work. The following points can help you understand how to file self-employment taxes and the different types of Form 1099.
What is the Self Employment Tax?
If you are wondering what is self employment tax then you need to have clarity before filing the tax. Self-employment tax and for those business owners who act as independent contractors or self-employed and they have to pay the self-employment tax which includes Social Security and Medicare taxes.
If you are self-employed then you will receive an Internal Revenue Service form 1099. Moreover, if you work for several clients then you will get several 1099 forms. The person or business who is sending you the form cannot withhold the taxes which means that no taxes are withheld on any 1099 income. You have to track your expenses and check if you are eligible for any tax deduction.
How to File Self Employment Taxes in QuickBooks?
Here are the three steps to file your self-employment taxes in QuickBooks.
Step 1: Connect with Your Bank to Receive Your Transactions
For a self-employed person, one needs to collect the deductions that come during the year which can help in lowering the tax liability. One of the best and quickest ways to receive your transactions in QuickBooks online is when you categorize them and connect your bank.
Step 2: Categories Expenses as they take Place
Filing taxes can be a tedious job and stressful one too but to reduce the time you can categorize the transaction as they take place. You need to sort out the experiences more often which will ultimately make it easier to identify the deductions and save money when filing for taxes.
When using QuickBooks you can notice that it lays out the popular business tax deductions for you and it includes the deductions on the income tax page as you categorize the transactions.
What do You need to Know about IRS Tax Forms for Freelancers?
Companies and individuals must send out tax forms to those people who have been paid more than $600 during the previous year and this process needs to be done at the very beginning of the year. There are several different types of tax forms and one should look out for the IRS forms and identify which one is for them.
How to File Your Self Employment Taxes Accurately?
Now that you have learned about the different steps to file your self-employment taxes in QuickBooks you must understand that it contributes an extra share to Social Security and Medicare. By using taxing software like QuickBooks throughout the year you can easily file the taxes when the filing season arrives.
By using the above-mentioned information you can accurately track your expenses and income and calculate all the taxes and have a smooth tax filing experience using QuickBooks.
What is Tax Form 1099-MISC?
Those were not aware of the tax form 1099-MISC which is a type of income tax form applicable to self-employed individuals. It briefly states the miscellaneous income that a simple self-employed candidate has from the calendar year which includes the income that you receive from working as an independent contractor. The money that you earn is the income that is subjected to taxation.
Like it is mentioned above businesses or firms send the 1099-MIS C tax form to those who are paid more than $600 during the tax year.
Several companies have contractors that fall under the 1099-K which is applicable for those contractors who receive credit card payments from their customers through online transactions like PayPal or other payment methods. One needs to make more than$2000 and receive more than 200 payments to be applicable for the 1099-K.
Individuals can also receive another type of 1099 form which is 11099- INT. This form describes the total amount that a candidate has collected over the year.
One can receive a 1099-INT tax form for every financial institution they have collected taxable interest. Moreover, several self-employed workers are preparing for retirement plans, life insurance contracts, and IRA contributions. If the retirement amount is more than $10 in earnings for the year they will receive another type of form which is form 1099-R.
When it comes to the 1099-R form it is quite helpful for things like Traditional IRAs, life insurance policies, pensions, and Roth IRAs. If a person is engaged in a direct rollover of a profit-sharing plan then they are applicable for the form 1099-R.
How to Fill up a W-9 and View Your 1099-MISC in QuickBooks Self-Employed?
If you want to fill up a W-9 in QuickBooks self-employment you first need to sign in from QuickBooks Self-Employed to complete the form and send it back directly. Now if you want to view the 1099- MISC form then you will also sign in to download your 1099-MISC when it’s ready.
This will allow you a quick and secure medium to share essential tax details with your employer.
Step 1: Get the Invitation from Your Particular Employer
You need to ask your employer or client to send you an invite to fill out your W-9. However, if you already have a self-employed account in QuickBooks, ask them to send the invite to the email address you use to sign in. however you can create an account just for your forms if you do not have one.
Step 2: Fill out Your W-9
- Open the invite email and select the link.
- If you already have a QuickBooks Self-Employed Account, select Sign in. This account has a few features: you can fill out your W-9, submit it, and view your 1099-MISC
- Go to the Clients tab.
- Follow the steps to fill out and submit your W-9.
Now your employer has all the details they require to complete your 1099-MISC.
Step 3: Update Your W-9
- Sign in to QuickBooks Self-Employed. Use the account that you have used to fill out the W-9.
- Select your profile icon.
- Select Tax profile.
- Make changes as needed.
Step 4: View Your 1099-MISC
- Sign in to QuickBooks Self-Employed.
- Go to the Clients menu.
- Select the Forms tab.
The article discusses how to file self-employment taxes in QuickBooks and the important tax form 1099 MISC. You will learn about the steps that you need to adhere and follow to carry out the process successfully. If you have further queries related to the filing of self-employment taxes in
QuickBooks, You can connect with Dancing Numbers team via LIVE CHAT.
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Frequently Asked Questions (Faqs)
What is Tax Form 1040-ES?
Self-employed professionals receive a total income without including taxes but they need to pay Social Security. An employer can withhold the taxes from the paychecks and submit them to the Social Security Administration on your behalf but you need to pay them every quarter there are certain regulations but the self-employed person needs to pay more than $5000 during the year.
What is Tax Form 1040?
This is a simple tax form that first came into effect in 2018 the form seeks details of things including Social Security number information about all the dependents including your children. Most people are eligible for a standard deduction.
What is Tax Form 1040X?
When a person makes a mistake while filing their original tax they can opt for filing form 1040X which allows a person to file with an amended return and make the necessary correction to 1040 that was previously submitted. It also allows a person to change the amount previously adjusted by the IRS.