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Thread: filing taxes as employee AND independent contractor?

  1. #1
    Picaresque
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    Default filing taxes as employee AND independent contractor?

    Has anyone else ever had to do this?

    I started out as a bartender at my club this year, and switched to dancing in June.
    Now I've got a W-2 from the club for my bratending stint, but no papers regarding dancing (no 1099...another thing that confuses me. Should I have gotten one? What exactly IS that? I've read other DD threads and done a google search in the hopes of figuring out exactly what a 1099 is, what I'm supposed to do with it, and what to do if my club doesn't give them out...but I really still have no clue.)

    How do I file taxes when I've got one employee job and one IC job in the same year? Do I use the same 1040 form for both? Do I need a separate form for each job? Do I need another, non-1040 form for dancing taxes? Anyone? Bueller?

  2. #2
    Banned Melonie's Avatar
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    Default Re: filing taxes as employee AND independent contractor?

    In a nutshell, you file your 'employee' income as wages on form 1040. You then complete Schedule C 'Profit or Loss from a Business' for your dancing earnings and expenses, as well as completing Schedule SE to calculate self-employment taxes due (which is roughly equivalent to both the 'employer's and 'employee's share of Social Security and medicare taxes, since self-employed people are filling both roles). You then transfer the resulting amounts back to the appropriate lines on the same 1040 form where you listed your 'employee' wages. It's not that big of a deal really.

    The 1099 form is an official reporting form used by businesses to report taxable payments made to non-employees back to the IRS. Those payments may consist of stock dividends, bank account interest, club payments for credit card charges processed on behalf of dancers, and a whole gamut of other stuff. All taxable payments received (i.e. dancing earnings) are legally required to be reported to the IRS, whether they are accompanied by a 1099 form or not. The same 1040 form has lines where these various amounts must be filled in.

    If you're really uncomfortable about this, but don't want to use a paid tax preparer who has experience with self-employed persons (which pretty much rules out H&R Block, Jackson Hewitt etc.) I highly recommend investing a few bucks to purchase Turbo-Tax or another tax preparation program. These tax preparation programs lead you by the hand as far as entering your various income sources and various deductible expenses. They also generate all of the appropriate forms and automatically transfer the various subtotals to the appropriate places on your 1040 form.

    As far as multiple 1040's this is a huge no-no. US federal and state tax rates are progressive, meaning that one person earning say $50,000 will owe far more in taxes than two people earning $25,000 each. You must file a single 1040 form which incorporates all of your various sources of taxable income.

  3. #3
    Picaresque
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    Default Re: filing taxes as employee AND independent contractor?

    Many thanks, Melonie! That helps.

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    God/dess sxybrat07's Avatar
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    Default Re: filing taxes as employee AND independent contractor?

    Very helpful, as I have to do this as well. I have an additional question though...one of my club treats me as an employee, the other as an IC. I currently work at both. Do I need to send in estimated taxes this year for the IC club?
    I believe you Dottie and you have my support

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    Default Re: filing taxes as employee AND independent contractor?

    Do I need to send in estimated taxes this year for the IC club?
    .. well, you need to have sufficient taxes withheld / paid each quarter to cover both your 'employee' and independent contractor tax obligations. If your 'employer' only withholds enough to cover your 'employee' earnings then yes you would need to send in an estimated tax payment check as well every three months. Also be aware that since your 'employer' is not officially aware that you have another income source, the amount of money that your 'employer' is withholding from your 'employee' earnings probably isn't sufficient to cover the taxes that you actually owe on those 'employee' earnings (the progressive tax bracket business again !).

  6. #6
    God/dess sxybrat07's Avatar
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    Default Re: filing taxes as employee AND independent contractor?

    Ok that makes sense, thanks Melonie
    I believe you Dottie and you have my support

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