Freelance income

[curiousgeorge]

Trying to help a friend...
Only income is from very little freelance work. Majority of income is from one client; paid to business name with an EIN, and reported on a 1099-misc. But a little amount is from another client who did not provide a 1099-misc. Report total on C-EZ - right? Total is extremely small - just a little above amount that requires filing a tax return. Is additional documentation required on the tax return for the amount that was not on a 1099?
Thanks.

[nancy65]

Report total on C-EZ - right? Right

Total is extremely small - just a little above amount that requires filing a tax return.

Don't forget the Self-employment Tax.

Is additional documentation required on the tax return for the amount that was not on a 1099? No

Don't neglect to deduct any related business expenses.

[mwcpa]

I agree with Nancy, SE tax kicks in when net profit from self employment exceeds 400.00... and SE tax has nothing to do with an income tax requirement....

do not forget any benefits, if qualified, from the EIC, the making work pay credit, etc...those may "wipe out" any SE tax, but to claim the benefits one needs to file....

[curiousgeorge]

Thank you Nancy and mwcpa!

Very complicated paperwork for self-employed; she just went ahead and filed an extension for both Fed and NY. She paid over what is owed from the rough calculations in order to avoid interest and penalty. Will this create red flags when actual forms are filed - and actual tax will be less than what she paid on the extensions or even zero with the EIC and Making Work Pay credits?

[commentator]

Apr 20, 2011 15:04:03 GMT -5 curiousgeorge said:

Thank you Nancy and mwcpa!

... Will this create red flags when actual forms are filed ...?

No.