As an independent contractor for Abe & Murray's Tax Service, I earned $6,000 during My work from 1/15 through 4/30.
Regarding my income, please discuss the following items:
What type of income is this?
What expenses, if any, could be deducted from the income?
What form is used to report income to me and the IRS?
What schedule will I fill out to report this to the IRS?
What will be my anticipated tax rate?
Is it better to be paid as an independent contractor or on-staff at a company?
The income is self employment income to you because it was for services provided.
As an independent contractor, you are entitled to all expenses relating to that work which could include auto mileage back and forth, supplies provided, use of equipment if any, state business license, dues and memberships which relate to the work plus education specific to the work. View the categories provided on the Schedule C for possible additional types of expenses.
The employer is required to submit a Form 1099 ...
The problem poses the reporting issues for an independent contractor as opposed to being classified as an employee. The solution explains how the income is treated on a tax return, which forms are included, what expenses are possible deductions plus the discussion about the labor law in such situations.