How are Self Employment Tax Deductions Cheaper?

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Expand view Topic review: How are Self Employment Tax Deductions Cheaper?

Re: How are Self Employment Tax Deductions Cheaper?

by thankful_for_CPA » Tue Mar 06, 2018 12:52 pm

Just finished my tax return with a local CPA. He was able to turn the "self-employment" income designated by the 1099-MISC into taxable income by adding a special schedule denoting the scholarship as an award; therefore adding it to mine and my wife's total taxable income. This reduced the tax amount drastically, and after her job factored in, we only only roughly $1200 total. I HIGHLY recommend visiting a CPA..

Re: How are Self Employment Tax Deductions Cheaper?

by taxes » Wed Feb 28, 2018 3:47 pm

In case any of you are still looking for help with filing your taxes, I used a CPA. Her name is Randee Abramson and she saved me a lot of money. You do not need to file it as self employed. Otherwise you'll likely end up paying double what you really owe. This is her website. She's in Florida, but she can handle everything through email/phone if necessary like she did with me.
http://www.abramsoncpa.com/

Re: How are Self Employment Tax Deductions Cheaper?

by concernedtaxee » Tue Feb 27, 2018 5:22 pm

littlehope wrote:
CPANEWS wrote:I just had my CPA run everything.

SMART stipends are not subject to self employment tax. I went from owing $3,000 on $14,000 worth of stipends to around $1500-1700.

Yay!
You give me hope! Haha

But on another note, yeah I definitely believe that we are not subject to self-employment tax considering we have a tax memo expressively stating we are not self-employed and the fact that this is a Scholarship Stipend which SMART even says on their website so if the IRS ever came knocking I have all the paperwork lined up from the FBI page in another thread, the tax memo, the SMART website stating it is a stipend, etc. to fight that there is literally no legal way we should have to pay that additional 15.2% self-employment tax. Also considering the fact I haven’t worked a single day for them since I only have a year commitment and won’t be doing the internship (even if you do though considering in the name they are interim support payments key word support and you don’t get it if you don’t have to move that is still not income).

I have an appt. on Friday so I will give an update on what they say, but heads up my taxes won’t match anyone else cause I’ve got that combined income with a spouse who also had a part time just with a 1099-MISC so basically my life just sucks during tax season. :lol: :roll: but I’ll try to isolate the taxes owed specifically due to SMART.

So, how did you appointment go?? I have on for tomorrow, any advice you would give me to bring up to my CPA??

Re: How are Self Employment Tax Deductions Cheaper?

by littlehope » Wed Feb 07, 2018 1:20 pm

CPANEWS wrote:I just had my CPA run everything.

SMART stipends are not subject to self employment tax. I went from owing $3,000 on $14,000 worth of stipends to around $1500-1700.

Yay!
You give me hope! Haha

But on another note, yeah I definitely believe that we are not subject to self-employment tax considering we have a tax memo expressively stating we are not self-employed and the fact that this is a Scholarship Stipend which SMART even says on their website so if the IRS ever came knocking I have all the paperwork lined up from the FBI page in another thread, the tax memo, the SMART website stating it is a stipend, etc. to fight that there is literally no legal way we should have to pay that additional 15.2% self-employment tax. Also considering the fact I haven’t worked a single day for them since I only have a year commitment and won’t be doing the internship (even if you do though considering in the name they are interim support payments key word support and you don’t get it if you don’t have to move that is still not income).

I have an appt. on Friday so I will give an update on what they say, but heads up my taxes won’t match anyone else cause I’ve got that combined income with a spouse who also had a part time just with a 1099-MISC so basically my life just sucks during tax season. :lol: :roll: but I’ll try to isolate the taxes owed specifically due to SMART.

Re: How are Self Employment Tax Deductions Cheaper?

by CPAAAYYYY » Wed Feb 07, 2018 11:04 am

PhdSMART wrote:
kbl2017 wrote:
PhdSMART wrote:Its not. Report it as scholarship income on line 7 of your 1040.
That's just $ in the box and SCH in the smaller box to the right?

Correct!

My CPA marked it as other 1099 income and then marked the attached 1099 as a stipend.

Re: How are Self Employment Tax Deductions Cheaper?

by PhdSMART » Wed Feb 07, 2018 8:48 am

kbl2017 wrote:
PhdSMART wrote:Its not. Report it as scholarship income on line 7 of your 1040.
That's just $ in the box and SCH in the smaller box to the right?

Correct!

Re: How are Self Employment Tax Deductions Cheaper?

by malarious » Wed Feb 07, 2018 7:37 am

kbl2017 wrote:The stipend should still be able to be considered scholarship income if you want it to.
That is absolutely not how I expect the IRS does things. There is a right way to report this, and a wrong way. The question is if they would catch the wrong way, not if there isn't one. My concern is picking the wrong way and paying the price, one does not mess with the IRS.

Re: How are Self Employment Tax Deductions Cheaper?

by Yessssss » Tue Feb 06, 2018 8:52 pm

CPANEWS wrote:I just had my CPA run everything.

SMART stipends are not subject to self employment tax. I went from owing $3,000 on $14,000 worth of stipends to around $1500-1700.

Yay!
I also highly recommend hiring a CPA over using online tools. It'll cost a little more, but is worth it in the long run to ensure everything is reported correctly.

Re: How are Self Employment Tax Deductions Cheaper?

by CPANEWS » Tue Feb 06, 2018 7:54 pm

I just had my CPA run everything.

SMART stipends are not subject to self employment tax. I went from owing $3,000 on $14,000 worth of stipends to around $1500-1700.

Yay!

Re: How are Self Employment Tax Deductions Cheaper?

by kbl2017 » Tue Feb 06, 2018 7:23 pm

mrs080peel wrote:
kbl2017 wrote:
KY502 wrote:So as non-employee comp, we can write off anything associate with school?
I mean, yeah if I have to claim I'm self employed, my job is school. In which case i would think supplies, food, housing, transportation should all be my buisness expenses. If I weren't 'working' as a student I wouldn't have these expenses.

I'm talking to a tax person though about the turbotax reply and if i can just put the stipend as a scholarship and "School related expenses" as the full write off in the self employed form. Stipends aren't supposed to be a salary theyre supposed to pay for the cost of living. The thing with the USRA internship is thats reported on Line 3 not line 7.
Can you let us know what your tax person says about the TurboTax reply?
Yup! The tax person is my brother (he's a train accountant and everything) but currently he isn't replying to me because I'm annoying, so I'll let you know what he says when he finally replies lol.

Re: How are Self Employment Tax Deductions Cheaper?

by mrs080peel » Tue Feb 06, 2018 2:31 pm

kbl2017 wrote:
KY502 wrote:So as non-employee comp, we can write off anything associate with school?
I mean, yeah if I have to claim I'm self employed, my job is school. In which case i would think supplies, food, housing, transportation should all be my buisness expenses. If I weren't 'working' as a student I wouldn't have these expenses.

I'm talking to a tax person though about the turbotax reply and if i can just put the stipend as a scholarship and "School related expenses" as the full write off in the self employed form. Stipends aren't supposed to be a salary theyre supposed to pay for the cost of living. The thing with the USRA internship is thats reported on Line 3 not line 7.
Can you let us know what your tax person says about the TurboTax reply?

Re:

by kbl2017 » Tue Feb 06, 2018 12:16 pm

KY502 wrote:So as non-employee comp, we can write off anything associate with school?
I mean, yeah if I have to claim I'm self employed, my job is school. In which case i would think supplies, food, housing, transportation should all be my buisness expenses. If I weren't 'working' as a student I wouldn't have these expenses.

I'm talking to a tax person though about the turbotax reply and if i can just put the stipend as a scholarship and "School related expenses" as the full write off in the self employed form. Stipends aren't supposed to be a salary theyre supposed to pay for the cost of living. The thing with the USRA internship is thats reported on Line 3 not line 7.

by KY502 » Tue Feb 06, 2018 11:41 am

So as non-employee comp, we can write off anything associate with school?

Re: How are Self Employment Tax Deductions Cheaper?

by kbl2017 » Tue Feb 06, 2018 11:15 am

https://ttlc.intuit.com/questions/37849 ... o-i-put-it

Just gonna put this out there.

Re: How are Self Employment Tax Deductions Cheaper?

by Nope nope nope » Tue Feb 06, 2018 10:51 am

kbl2017 wrote:
PhdSMART wrote:Its not. Report it as scholarship income on line 7 of your 1040.
That's just $ in the box and SCH in the smaller box to the right?
If the IRS sees the income reported as scholarship from you but non employee comp from SMART then you’ll end up paying more in the long run. If you’ve made 33k this year you’re going to owe around 6,600ish.

Re: How are Self Employment Tax Deductions Cheaper?

by kbl2017 » Tue Feb 06, 2018 7:52 am

PhdSMART wrote:Its not. Report it as scholarship income on line 7 of your 1040.
That's just $ in the box and SCH in the smaller box to the right?

Re: How are Self Employment Tax Deductions Cheaper?

by kbl2017 » Tue Feb 06, 2018 4:08 am

The stipend should still be able to be considered scholarship income if you want it to. We aren't self employed as stated in the handbook - I'm expecting around $4000 in federal and $1000 in state for 33k a year. Some people seem to think that's not likely though?

Re: How are Self Employment Tax Deductions Cheaper?

by malarious » Tue Feb 06, 2018 3:05 am

This is 1099MISC income, it is not scholarship income itself.

That said, accountants may have a way to fudge that.

Re: How are Self Employment Tax Deductions Cheaper?

by PhdSMART » Mon Feb 05, 2018 10:55 pm

Its not. Report it as scholarship income on line 7 of your 1040.

Re: How are Self Employment Tax Deductions Cheaper?

by CSMajor » Mon Feb 05, 2018 8:53 pm

littlehope wrote:What are some items that people have written off in the past. I have basically found that either people file in a way that they don't pay the self-employment tax or enter a massive amount of deductibles so that the total "earned income" is taxed even less.

So far I can think to deduct the following:
Travel Costs from the Site Visit
Mileage from driving to the airport for my Site Visit
Percentage of Car Interest Used for Business
Food costs from the Site Visit
Parking Fees throughout the fall semester
Supplies Costs (not much since I find my books on the cheap and didn't get any new tech since I've been a student for a while)

The items listed above only total in about $1800 in deductions. In order for deductions to have more of an impact than no self employment tax you would virtually have to halve your taxable stipend income. I really don't see how that is possible even if you have a CPA sent from heaven.
This is all keeping in mind that you cannot legally deduct commuting mileage.
If anyone can work some magic please help cause taxact currently says I owe ~$5,800 in fed taxes and I only saved $4300.(I'm still going in to see a CPA but I want to bring in as much information as I can to them)
How did you manage to save money? My CPA told me I'm looking at $7,000 in taxes when I've made 36,000 this year.

How are Self Employment Tax Deductions Cheaper?

by littlehope » Mon Feb 05, 2018 7:56 pm

What are some items that people have written off in the past. I have basically found that either people file in a way that they don't pay the self-employment tax or enter a massive amount of deductibles so that the total "earned income" is taxed even less.

So far I can think to deduct the following:
Travel Costs from the Site Visit
Mileage from driving to the airport for my Site Visit
Percentage of Car Interest Used for Business
Food costs from the Site Visit
Parking Fees throughout the fall semester
Supplies Costs (not much since I find my books on the cheap and didn't get any new tech since I've been a student for a while)

The items listed above only total in about $1800 in deductions. In order for deductions to have more of an impact than no self employment tax you would virtually have to halve your taxable stipend income. I really don't see how that is possible even if you have a CPA sent from heaven.
This is all keeping in mind that you cannot legally deduct commuting mileage.
If anyone can work some magic please help cause taxact currently says I owe ~$5,800 in fed taxes and I only saved $4300.(I'm still going in to see a CPA but I want to bring in as much information as I can to them)

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