How to file self-employed income

[KyleAndrea 1]

Hello! I hope you guys could help me understand the filing process because the IRA explanation is too confusing for me. I came here in 2012, and became a PR in March. I have a part-time job here and also work as a freelancer for an overseas company.

My questions are:

1. Are all self-employed residents required to file for income tax? Coz I think there are conditions involved? Or did I misinterpret it?

2. Should I file as a single or married filing jointly? The latter was how my husband filed our income without foreign income from me.

I think that's it for now. Anyone who has experience on this? Thank you!

[TBoneTX 46,151]

*** Thread moved from the "Finding Work in America" forum to the "Moving Here & Your New Life forum as a seemingly better location for these queries. ***

[Nich-Nick 3,354]

Hello! I hope you guys could help me understand the filing process because the IRA explanation is too confusing for me. I came here in 2012, and became a PR in March. I have a part-time job here and also work as a freelancer for an overseas company.

My questions are:

1. Are all self-employed residents required to file for income tax? Coz I think there are conditions involved? Or did I misinterpret it?

2. Should I file as a single or married filing jointly? The latter was how my husband filed our income without foreign income from me.

I think that's it for now. Anyone who has experience on this? Thank you!

It will be impossible to explain taxes completely but maybe this will help.

You don't file single because you were married by the end of the tax year 2012. Your husband's joint tax return included you and was supposed to include all your earnings as well. It is as much your tax return as his because it was married filling joint.

It is supposed to include your part time job as well as your self employment (freelance work). For you there are two extra forms that go with the joint tax return for reporting your "business" income:

Schedule C and Schedule SE

Schedule C allows you certain business deductions possibly. It determines if you had a profit or loss with the business.

Schedule SE calculates your self-employment tax. Working for an employer, your contributions to Social Security and Medicare are taken out of your paycheck and submitted on your behalf. PArt of it is paid by the employer and part is taken from your check. Your employer shares the cost with you. When you are freelance you are the "business owner" of you own business to the IRS. You have to make your own contributions to Social Security and Medicare for the part of your earning that were freelance. You pay the full amount because there is no employer required to pay half of your part. Schedule SE calculates your share and adds it to the tax return. It gets credited to your Social Security account toward your future retirement and Medicare.

[slvrfx576 15]

Hello! I hope you guys could help me understand the filing process because the IRA explanation is too confusing for me. I came here in 2012, and became a PR in March. I have a part-time job here and also work as a freelancer for an overseas company.

My questions are:

1. Are all self-employed residents required to file for income tax? Coz I think there are conditions involved? Or did I misinterpret it?

2. Should I file as a single or married filing jointly? The latter was how my husband filed our income without foreign income from me.

I think that's it for now. Anyone who has experience on this? Thank you!

First of all, it is the IRS, not the IRA

Second, follow Nich-Nick' s advice on filing Sch C and Sch SE. What makes you think that you might not be required to report it ? Yes, you must report your self employment income and pay the appropriate taxes on it.

Third, you can NEVER, EVER file as "single" if you are married. What confusion can there possibly be about these terms ? You are one or the other.

Fourth, if your husband filed "married jointly", and did not include your foreign income then you both (jointly) have filed a return which is incorrect and could be considered by the IRS to be fraudulent. You should immediately correct it by filing an amended return (1040X)...consult a tax professional ! It may cost you a few $$$ now, but save you lots of problems later.

[I AM NOT THAT GUY 5,715]

It will be impossible to explain taxes completely but maybe this will help.

You don't file single because you were married by the end of the tax year 2012. Your husband's joint tax return included you and was supposed to include all your earnings as well. It is as much your tax return as his because it was married filling joint.

It is supposed to include your part time job as well as your self employment (freelance work). For you there are two extra forms that go with the joint tax return for reporting your "business" income:

Schedule C and Schedule SE

Schedule C allows you certain business deductions possibly. It determines if you had a profit or loss with the business.

Schedule SE calculates your self-employment tax. Working for an employer, your contributions to Social Security and Medicare are taken out of your paycheck and submitted on your behalf. PArt of it is paid by the employer and part is taken from your check. Your employer shares the cost with you. When you are freelance you are the "business owner" of you own business to the IRS. You have to make your own contributions to Social Security and Medicare for the part of your earning that were freelance. You pay the full amount because there is no employer required to pay half of your part. Schedule SE calculates your share and adds it to the tax return. It gets credited to your Social Security account toward your future retirement and Medicare.

Correct information, plus set plenty of money aside -- self-employed get hit pretty hard (15.3% self employment tax plus income tax on net profits), not everything is deductible as an expense, and there are plenty of pitfalls for the first time filer that will generate an audit. Document everything, especially mileage for use of your vehicle (keep a log), and anything that can be used for either business or personal use.