Hello everyone. I have a question. I did solely agency work in 2007 and am now preparing to file my taxes. With this agency, my income is listed on a 1099-Misc. (no taxes taken out) Does this mean I am self employed and need to file a schedule C or do I just list it under miscellaneous income? I don't consider myself "self employed" but that's what 1099-MISC forms are usually for. Hope this makes sense. Thanks.
You need to seek the advice of a tax professional immediately. You are responsible for all of the taxes that are owed for the year, and if none were being taken out, then you are considered self-employed. But if you do not hold a corporation or LLC or S corporation, your agency call also be in big trouble with the IRS for going this route to get out of paying their share of the Medicare, etc, that they would owe on their employees, as well as Workmen's Comp, etc. The IRS is quite strict on this and has taken agencies to court over this. By not taking out taxes, they were not keeping you on their books as an employee, so you were not covered under many things by them, including malpractice insurance and liability insurance. Do hope that you have your own already.
It is not misc. income, it was earned and taxes need to be paid on it. Misc income gets taxed at a higher rate. Do hope that you have been putting away funds as you are looking at about 35 to 45% being required in taxes, including both of the required payments for Medicare, your employer would have paid 1/2 and you would pay the other 1/2; but this way you need to pay 100% of this. As well as your federal tax requirement as well as the state and possible city or county tax requirement if required in your area.
Since we can not offer tax advice here, will close this thread and do hope that you seek counsel on this immediately.
Last edit by suzanne4 on Jan 20, '08