Moose,
I was planning to make an appointment to talk to an accountant about this,
but it sounds like TurboTax makes it pretty simple. Do you know how much
self employment income one can earn before you have to pay quarterly?
Regarding deducting expenses, is there a limit on how much you can deduct? I
read something on the IRS website about this, but in the end I was only more
confused. Also, can I do my state taxes with Turbotax as well, or just
federal?
Thanks for the help,
Darin
----- Original Message -----
From: "Moose" <olymoose@xxxxxxxxxxxxxxx>
To: <olympus@xxxxxxxxxx>
Sent: Monday, January 30, 2006 2:24 PM
Subject: [OM] Re: [OT]Are any list members US Tax Accountants?
> Darin wrote:
>
>>Hi, I'm contemplating submitting some images to a stock agency, and I want
>>to determine how this will affect my taxes before I do it. Any advice
>>would be greatly appreciated!
>>
> I'm no expert, but none have answered you, so..
>
> If you either already have to file an income tax return or earn $400 or
> more from self employment, you must report that income on Schedule C or
> C-EZ attached to form 1040.
>
> Perhaps the simplest way to understand it is to know that the IRS is
> charged with collecting the taxes on every $ you acquire, including
> income, Social Security and Medicare taxes. In the case of employees,
> employers are responsible for collecting and remitting the employees's
> share of all these taxes.
>
> When you have income from any source that doesn't collect these taxes,
> you must report it on a separate form because of the Social Security and
> Medicare taxes that need to be collected in addition to income taxes.
> Just to be confusing, they call these taxes when charged on self
> employment income "Self Employment Taxes". That makes them sound like
> some special, additional tax for the priviledge of not working for
> somebody else, but they are in fact just the same taxes that employers
> withold from paychecks for Social Security and Medicare.
>
> From all this comes the definition of self-employment income. It's any
> income that somebady else hasn't already withheld taxes from.
>
> So if you sell images, individually, or through a stock agency, and
> Social Security and Medicare taxes are not withheld, you must report
> that income on Schedule C or C-EZ and pay the taxes with your income
> taxes. The other reason to file Schedule C is so you can deduct expenses
> incurred in generating the income. For something as simple as you
> propose, the forms are dead easy to fill out. I make it even easier by
> using TurboTax.
>
> If you make very much self employment income, you will be required to
> pay quarterly estimated taxes the following year or possibly pay
> penalties for underpayment, depending on taxes due for that year.
>
> If all this makes your head hurt, just use TurboTax or one of the other
> tax prep programs. You just fill in the blanks as they ask you questions
> and they do all the rest. If you buy a tax program only because of the
> self employment income, you should be able to deduct it as a business
> expense.
>
> Moose
>
>
>
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