Taxes & Working At Home

One of the annoying parts of being a working adult is taxes. While you can escape many of the headaches from the outside environment, taxes is unfortunately something you can never escape. Most homeworkers are 1099/W-9 Independent Contractors. This means that you don't have taxes taken out, and you must file your income on a miscellaneous form if you earn over $600 from each particular opportunity. Here is some brief information to consider.

Individual Taxpayer Identification Number (ITIN)

Form W-9 (or an acceptable substitute) is used by persons required to file information returns with the IRS to get the payee's (or other person's) correct TIN. For individuals, the TIN is generally a social security number (SSN).

What Is a 1099 Form?

If you received certain types of income over $600.00 for the year as an Independent contractor, you may receive a Form 1099 for use with your federal tax return. You should receive these forms from the payer by early February, according to the IRS. Payers have until Jan. 31, 2003, to mail these to you. If you have not received an expected 1099 by a few days after that, contact the payer. If you still do not get the form by Feb. 15, call the IRS for help at 1-800-829-1040.

How To Report Earnings

You must complete the following federal tax forms by April 15 following any year in which you have net earnings of $400 or more:

• Form 1040 (U.S. Individual Income Tax Return);

• Schedule C (Profit or loss from Business) or Schedule F (Profit or Loss from Farming as appropriate; and

• Schedule SE (Self-Employment Tax).

These forms can be obtained from IRS and most banks and post offices.

Send the tax return and schedules along with your self-employment tax to IRS