Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




1099-MISC

Reply to topic
Money Talk > Taxes

Author Thread
kadru_tainphu
New Member


Cash: $ 1.55

Posts: 7
Joined: 17 Dec 2013

1099-MISC  Reply with quote  

My wife gets a 1099-MISC from her employer. It is reported as Other income. Can she open a SEP IRA (IRS web site says 25% of income is allowable)?

Thanks
Post Tue Dec 17, 2013 4:53 pm
 View user's profile Send private message
clydewolf
Senior Member


Cash: $ 50.25

Posts: 248
Joined: 27 May 2012

Re: 1099-MISC  Reply with quote  

quote:
Originally posted by kadru_tainphu
My wife gets a 1099-MISC from her employer. It is reported as Other income. Can she open a SEP IRA (IRS web site says 25% of income is allowable)?

Thanks

On the amount of profit from her job, she can use that to fund her SEP. This amount is deducted from your gross income on 1040 line 28.

Your wife will need to pay employer taxes, SS and Medicare, on the profits from her working at a rate of 15.3%. To determine her profits she needs to complete Schedule C or C-EZ.

The profit as determined on Schedule C/Cez is reported on your 1040 line 12.

Then based on the profits she will complete Form SE to determine the amount of SS and medicare tax she needs to pay. This tax is reported on your 1040 line 62.

One half of the employer tax is subtracted from your gross income on your 1040 line 27.

If she buys health insurance she can deduct that expense on 1040 line 28.

You can learn more at irs.gov and reading some pubs:
* 334 - Tax Guide for Small Business
* 535 - Business Expenses

Next year she may want to make estimated payments or adjust your withholding (form W-4) to pay for the income and employment taxes.
Post Thu Dec 19, 2013 9:38 pm
 View user's profile Send private message
kadru_tainphu
New Member


Cash: $ 1.55

Posts: 7
Joined: 17 Dec 2013

1099-MISC  Reply with quote  

Thanks. How do we know that Line 56 (self employment taxes) covers social security and medicaid?
Thanks
Post Fri Dec 20, 2013 11:04 pm
 View user's profile Send private message
kadru_tainphu
New Member


Cash: $ 1.55

Posts: 7
Joined: 17 Dec 2013

1099-MISC  Reply with quote  

Thanks. But can she take deductions for both IRA as well as SEP IRA?
Post Sun Dec 22, 2013 1:14 am
 View user's profile Send private message
kadru_tainphu
New Member


Cash: $ 1.55

Posts: 7
Joined: 17 Dec 2013

1099-Misc  Reply with quote  

We could check her earning from ssa.gov web site. Thanks.
But can she calim both IRA and SEP IRA deductions in the same year?
Post Mon Dec 23, 2013 2:31 pm
 View user's profile Send private message
clydewolf
Senior Member


Cash: $ 50.25

Posts: 248
Joined: 27 May 2012

Re: 1099-MISC  Reply with quote  

quote:
Originally posted by kadru_tainphu
Thanks. How do we know that Line 56 (self employment taxes) covers social security and medicaid?
Thanks

Your 1040 line 56 is for Social Security and Medicare (not medicaid).
Line 56 reads, "Self-employment tax. Attach Schedule SE".

Social Security and Medicare taxes are employment taxes. People that are self employed are both employer and employee. These taxes are calculated on Form SE.
Here is a link to the instructions for Form SE: http://www.irs.gov/pub/irs-pdf/i1040sse.pdf
Post Mon Dec 23, 2013 3:30 pm
 View user's profile Send private message
clydewolf
Senior Member


Cash: $ 50.25

Posts: 248
Joined: 27 May 2012

Re: 1099-MISC  Reply with quote  

quote:
Originally posted by kadru_tainphu
Thanks. But can she take deductions for both IRA as well as SEP IRA?


Yes, if she otherwise qualifies and makes the contribution to her IRA. The SEP IRA is a plan from the employer. The IRA is a personal account.

Contributions to the SEP will lower her profits from self employment.
Contributons to a personal Traditional IRA are deductible.
She can make contributions to both plans and deduct them in the same tax year.
Post Mon Dec 23, 2013 3:42 pm
 View user's profile Send private message
kadru_tainphu
New Member


Cash: $ 1.55

Posts: 7
Joined: 17 Dec 2013

1099-MISC  Reply with quote  

Thanks a lot. I did open a SEP IRA with 25% of her income. But I am still not sure about the total contribution limit allowed for 2013. Is it still possible to open a SIMPLE or some other IRA to save more taxes?
Post Mon Dec 30, 2013 2:15 pm
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2016