What Income Is Taxable When Self-Employed? 1099-misc 1099-k [Taxes in TurboTax VIDEO #2]

are my 1099s double counting my income and where do I enter my income in TurboTax Aloha friends Amanda here from the business finance coach where I'm simplifying finances and helping you grow your self-employed work into a business welcome to my tax series in today's video I'll be doing TurboTax and we'll be entering your income and 1099s be sure to check out my other videos in this series turbo tax is a high-end tax software but I'm also covering mid-and like Tax Act and a low end which is actually free if you're self-employed and with a 1099 called free tax USA and I'll be doing comparison videos at the end so in the desktop software you'll actually have this business tab I'll click continue and I'll choose what I work on to get to the main listing if TurboTax is confusing at first just click around a little bit because it's really not that confusing it gets simple very quickly if you're on self-employed you won't have a business tab in a personal tab instead you'll just have the options over here on the left and you'll click federal taxes and then you'll click income and you'll scroll down to self-employed business income expenses just like here we have business income and expenses so you'll click update if you've already set up your business like we did in the profile setup video so you can see there's no gross income no net income we just set the business up in that first video so now I'm going to click Edit this business and this is where we'll enter everything for this business and if we need to change any of the basic information that was in this business profile so now I'm going to come in to business income and you can always click these learn more buttons in any DIY tax software and this will save you so much time and headache like if you're wondering what to do just take some time read these they do answer the questions any income you receive from products or services you provide this income may be reported on forums you received from clients or customers such as form 1099 miscellaneous once you've entered your business then couples start looking for deductions and this is why guys so I'm gonna click this start button this is why my business spreadsheet template walks you through catching up your income in expenses for 2017 it's specifically designed for those of you who didn't keep track during the year because I know there's a lot of you out there so be sure a link that spreadsheet template if you haven't done that training be sure to use it to get all of your records cut off because if you do that first then it makes it so much easier to do this step okay so what we're gonna do is you'll see that there's four different sections here 1099 miscellaneous income which is where you went to your 1099 s general income which is any income that you received other income which is very uncommon something not to do with your self-employed work you'll rarely use this I won't even go into this one money you gave back to customers this you will also rarely use because usually you wouldn't have it in your your income it would have been subtracted from a 1099 miscellaneous and you would most likely in your records subtract it out because you had to pay it back so if you're tracking how much money you made you're gonna subtract what you had to pay back so in that case you don't report that here when this would really matter is if your business got really big and you are tracking refunds separately you know and then you just reported refunds and total income the other place it could affect you is if you did work for someone in a prior year and for whatever reason you returned some of their money so you paid taxes on their money you entered it for your income last year and you had to give some back the next year that's when you could use this income you gave back so let's just go into the 1099s now this is only for $10.99 yes I have them no i don't so let's say yes and this is only you'll say who paid you company the payers ID or their social security number only why no you should have box seven on employee compensation and again you can click these to double check anything you have a question about so we'll say we were paid let's do 70 thousand oh let's say let's say we were paid twenty thousand on 1099 miscellaneous --is and that's usually all that's on them so continue and that's it let's say we just got one form from one company now you don't enter 1099 K here 1099 K's became popular last year and 1099 KS are a form that is reported by the credit card agency or whatever like oftentimes a lot of freelancers will use different sites online that are really like a matching of people who want services with giving the services but they're ultimately just a payment processor a lot of those types of businesses are having to issue tenon and Cays which is really their requirement to the IRS for payment processing so you don't actually enter your 10k you just include that amount in your general income because if you tracked all your income and expenses you would have included those amounts now you should of course check any form you get that it's right if it's not send it back to the issuer a lot of small businesses are break out of their finances so definitely don't take their word for it track your money and have them correct anything that's a mistake so then we'll go into this general income and this is where in my business spreadsheet template where I walk you through updating your 2017 accounting records I explain that you can do one income type or you could break it out if you do different types of service it might be easiest to break it out by the type of service you should break it out by whatever is most convenient for you to get your records organized and that you want to look at the totals from and if you only have a few clients you keep track client one client to client three you could enter that here it doesn't matter what you enter for the description it's however you want to keep track of it so we could go ten thousand and you could of course add all this up now obviously these people probably should have issued you if this example was real these people should have issued us form 1099 miscellaneous is because they paid over six hundred however it's not your job to make other people follow the rules and if you file and they issue you a 1099 miscellaneous later as long as you included the income in here you don't need to amend your return just be sure to have your records and have the form and you already filed if you corrected it you would move the money out of here put it up here and it would have no effect on your return so there's no actual need to amend but you just need to respond to the IRS and show them that hey I included it in my general income okay so that's it for income you press Continue boom done so thanks for watching be sure to check out my business spreadsheet template if you need help getting your records cut up be sure to check out the other videos in this tak series whether you're looking to do your taxes yourself or you're looking to understand and get your stuff organized to give to an accountant or CPA either way this can be helpful I am an EI which means I have a distinction through the IRS to file all types of business returns so I do know what I'm talking about I've done taxes for big business public accounting firms I started in venture capital companies which are pyramid partnerships extensive business returns and I love business return so I'll be getting to the more complicated returns after this self-employed series you

Channel: Business Finance Coach

Views: 29,738

Keywords: TurboTax Self-Employed, TurboTax Home & Business, what income to report when self-employed, what, income, do I have to report, for taxes, form 1099-k, form 1099-misc, what do I do for taxes when I'm self-employed, how to do taxes in turbotax, how, to, enter, taxes, in, TurboTax, how to file 1099 taxes, how to file 1099 misc for independent contractor, 1099 tax deductions

Id: jPXHglQz9Lc

Length: 8min 58sec (538 seconds)

Published: Thu Feb 15 2018