Self-employment Tax-- a way to explain to a client: If you were working for someone else & getting W-2 reportable wages, you know that you would have a portion deducted for Social Security & Medicare taxes. And, your employer would also be paying these amounts. Now if you're in business for yourself, you are both employer & employee, and it is your responsibility to pay both portions. This tax is based upon the profitability of your business as reported on Schedule C & not on your taxable income as reported on Form 1040. Hence, it is not uncommon for someone to owe no “income tax” at the time that they file, but still owe substantial self-employment taxes (& penalties, if quarterly estimated payments have not been made). Learn more under the Tax page
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Some thoughts: Not required to know, but things I try to remember and share with clients when appropriate
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From Keepertax.com an awesome Mileage Log -- in Google Sheets which can be converted to Excel (click image to open--then save a copy to your Google Drive)
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Here is a multipage spreadsheet for tracking all income and expenses including mileage. You need to enter the correct mileage for the tax year. In Google Sheets which can be converted to Excel (click image to open--then save a copy to your Google Drive)
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Mileage Tracker Log
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Diagram-- Business vs Commuting Mileage (PUB 4012)
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Terrific handout for doing Rideshare Driver Taxes
Ridesharetaxhelp.com
One resource you may find very helpful (and where the first two attachments below came from) is http://www.ridesharetaxhelp.com/ Ridesharetaxhelp was created by the Center on Budget and Policy Priorities, part of the Get It Back Campaign. |
You can contact me at maryvitataxes@gmail.com
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Please note: I, Mary Meador, AM NOT a certified accountant or tax law expert. I volunteer with VITA providing free tax preparation for individuals and families whose income is less than $66,000 a year. We deal with simple returns at our sites. I cannot guarantee the accuracy of all the information on this site as tax laws change and I may not have a clear understanding of complicated issues. I am trying to provide basic tax preparation information for our volunteers to get started--remember Publication 4012 is your go-to resource for questions, as well as irs.gov and Publication 17. I hope you find this information useful and easy to understand. Thanks for being a VITA/TCE volunteer!
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