Easy Ways to Calculate your 1099-MISC Income Forms
One of the facts that’s present in life that you simply cannot deny are taxes. It’s actually something that you cannot avoid. When you are a self-employed individual, it’s actually your obligation to make sure that your credit responsibilities are all in check. Because you are actually a 1099-MISC income earner, it is crucial that you will show some proof of income for your insurance purposes, taxation laws and loans. When you are a freelancer, the taxes which you pay will go to Social Security and also in Medicare. If ever you were given a 1099-MISC form, below would be the things that will help you know more about it.
All the self-employed individuals or known in other terms as the 1099-MISC income earners needs to pay tax for each quarter to the IRS. For every January, you will be receiving a 1099-MISC form in your mail from each company which you have worked in the previous year. If in case you have worked for more than one firm in a single year, the number of forms that you will get is equal to the company you have worked with in that year.
Each of these forms will reflect a certain amount in Box 7, which is the overall amount that you were remunerated by an employer, which means that you will need to pay tax on the amount specified. You have to take note that it is your responsibility on staying on top of your credit responsibilities when you ever fail in the income bracket.
When filling a form, the company which you have worked for throughout the entire year will do the total of your earnings on each of the 1099 MISC form. This is why throughout the year, it is important that you will collect and also track your earnings.
How to Calculate your Tax in a 1099-MISC Income
Total your income amounts on each of your 1099 MISC form and in case you have more than one form, you should total all of its income from all the forms.
Total your business expenditures that you have tracked and then subtract this from your total income and it will bring you to your net income.
Multiply on the net income amount by 0.9235 for you to calculate on your taxable income.
Do some check on the IRS tax table with regards to the amount of tax that you owe on the taxable income. You should bear in mind that tax schedule will actually vary from each state.
Now, you could submit your 1099 MISC form electronically and the payment should be made by 8pm before January 31st.