I'm in the process of doing my taxes using TaxAct and this income has me stumped.

I was laid off of my job of 10 years working for a government contractor. After a few months, I was then asked to do some work out of state for another government contractor. I was not their employee, but independent contractor I guess is what you call it.

I did work for about 10 days. They paid my food per-diem each day. They paid my hotel, but I was reimbursed my airfare and car rental. So the total that is on my 1099 MISC is my labor of 5,610.00 and the additional airfare, per diem and car rental reimbursement of 2,067.84 for a total of 7,677.84.

How do I go about filling out my tax forms for this? When making arrangements to go to this company I paid out of pocket my airfare, car rental, food, etc. and they just reimbursed me for the costs. I thought that was it. I didn't realize I'd have to pay some sort of taxes on top of that??? I just did this one job and don't plan on another. It just helped while I was unemployed. Do I STILL have to pay some type of self employment taxes? It just seems like I'm being taxed all over and I come out making a lot less than I thought and I'm still unemployed so this is hurting me because I didn't realize I'd be responsible for all these payments.

Edited to add that in doing my federal taxes and reviewing what I've done so far, I'm having to pay 543.00 in Self employment taxes just for doing this one job? Geesh.

Could someone help me figure out what the heck I need to do to go about all this? I would so appreciate some help. THANKS!!!!!!

AtlantaTaxExpert

Your need to report the income earned and reimbursements on Schedule C as INCOME.

You then deduct the expenses you incurred as deductible expenses.

The difference is your net income, which is subject to income taxes at your marginal rate and the 15.3% self-employment tax, which is calculated on Schedule SE.

Welcome to the world of the small businessman, who typically pays between 30 - 50% of his net income in taxes.

diddlydudette1

Thanks Mr. AtlantaTaxExpert for the welcome into the Self Employment world and by the way.....I'm not liking it at all. It's been a learning experience for sure...gotta love the SE tax, etc.

Thanks so much for answering my question. This board is awesome.

Someone told me that I couldn't deduct my expenses but I had to count it as my income because it was all included in my non-employmee compensation. That just didn't sound right at all so I'm glad I asked.

AtlantaTaxExpert

Glad to help!

And, BTW, NO ONE said you had to LOVE the SE tax! You just have to PAY IT!