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nickynak · Oct 24, 2007, 12:32 PM

I will be starting a part-time job doing some accounting work and the company that is hiring me said they will be giving me a 1099 form instead of w-2. I realize I have to pay taxes on my own, but I have the following questions:
1. Do I have to pay taxes quarterly?
2. Since I don't own this business, can I still take deductions like milage?
3. I am also a part-time student trying to finish my accounting degree, since what I am studying helps me with my new job, can school expenses be deductible?
4. Are there any other deductions that I can take? ( I won't be working from home.)

AtlantaTaxExpert · Oct 24, 2007, 04:38 PM

1) Probably, to make sure that you have the money come time to file your tax return.

2) You DO own a business. It is accounting work done on a contract basis.

3) NO! Any education that qualifies you for a profession cannot be deducted as employee business or training expenses.

4) Mileage, tools needed for the work (like a laptop), office supplies, cell phone costs if you use the cell phone for the contract work.

Mobea · Oct 24, 2007, 05:18 PM

If the mileage is for driving back and forth to the office (company) you will be working for, then it is considered commuting miles, non deductible.

AtlantaTaxExpert · Oct 25, 2007, 09:17 AM

Sorry, Scott, but Mobea IS correct.

The initial trip from your home to the office, and the last trip from the office to home, IS commuting, whether you are being paid under a W-2 or under a Form 1099.

The IRS has made that point abundantly clear in multiple publications.

nickynak · Oct 25, 2007, 09:25 AM

I emailed the IRS about the commuting and this is part of the overall response they gave me regarding commuting:
Form 1099 Misc with the amount of income in Box 7 and not a Form W-2.
Your questions are
regarding expenses such as mileage, clothes, and day care
expenses.***Mileage*** As for your mileage, you cannot deduct the costs of taking a
bus, trolley, subway, taxi, or driving a car between your home and your
main or regular place of work. These costs are personal commuting
expenses. You cannot deduct commuting expenses no matter how far your home
is from your regular place of work. You cannot deduct commuting
expenses even if you work during the commuting trip.***[/I]

Mobea · Oct 26, 2007, 03:57 PM

Hey ScottGem, could you please add a different comment now? I hate seeing those little red marks on my comments list. LOL

AtlantaTaxExpert · Oct 26, 2007, 08:50 PM

I agree; RED is hard on the eyes! :-)

rj37261 · Feb 4, 2010, 03:32 PM

I'm a contractor . The person that hired me gave me a w-4 and told me that it releases him from taking tax out. Should he send me a 1099 form

AtlantaTaxExpert · Mar 4, 2010, 11:53 AM

Most contractors get paid under Form 1099-MISC, so, yes, he should give you a Form 1099-MISC if he paid you more the $600 for 2009.

renelmiller0120 · Oct 30, 2012, 03:55 PM

I will be starting a part-time job doing some accounting work and the company that is hiring me said they will be giving me a 1099 form instead of w-2. I realize I have to pay taxes on my own, but I have the following questions:
1. Do I have to pay taxes quarterly? This would be a good idea; you may not owe any taxes but when you file at the end of the year it would be nice to get some back or if you do end up owing then you won't be penalized for not filing.

2. Since I don't own this business, can I still take deductions like milage?
If you are receiving a 1099 it is like you are the boss; so it is income to your name and social security number. You are the owner of you and responsible for yourself and your taxes. What business do you not own; in a way this is kind of like a business. But you get to deduct all expenses that are tax deductible as well as claim the income! You don't have to change your name to a business name or apply for a EIN from internal revenue service either. The companies that pay you get to use your expense as a tax deduction for outside services.

3. I am also a part-time student trying to finish my accounting degree, since what I am studying helps me with my new job, can school expenses be deductible?
Are you getting any student loans now while you are in school? Or are you paying for your schooling out of your pocket? Normally; if your schooling is being paid with loan funds, the tax deduction, if it is deductible, would come at a later time when you are paying it off.
If you are paying for school as you go and your current employer is not paying for any of it; then it is my understanding that the deduction for any schooling would come only if you were in business for yourself.
4. Are there any other deductions that I can take? ( I won't be working from home.) If you are working for someone else and receiving a W-2 at the end of the year, you have the deductions that the IRS allows and spells out on the tax returns (if you are filing long form) i.e. the Deductions for investments gains and losses. To have any kind of deduction for expenses; you would have to be something more than most of us normies. But for instance, I did accounting work for 35 years of my life for someone else; I received great wages and perks but I always owed taxes at the end of the year because of the amount I made. There were no tax deduction breaks for me but I was in the mid range for income level. If I had made more than what I did and I could have afforded to make investments with my income then I would have had some tax deductions.

You should be learning all of this in your schooling. Your instructor should be able to give you all kinds of advice!
I am kind of surprised that you have questions such as this since you are in accounting for your degree.

Good luck. Hope this helps.

AtlantaTaxExpert · Oct 30, 2012, 05:56 PM

1) What you propose is BAD money management. NEVER pay taxes before they are due if you can do so without paying any penalties. In the FIRST year of 1099 work, there is a "safe harbor" which exempts the 1099 worker from any penalty assessment for paying when he files.

2) Mileage deductions ARE allowed provided the 1099 worker is not reporting to the same location each day to work. In that case, the mileage is commuting cost, and commuting cost is NEVER deductible.

3) There is a host of requirements that must be met to deduct education costs as an employee-business expense. Off-hand, I would say that you CANNOT deduct the cost of the accounting degree EVEN IF it helps you in your job because it qualifies you for a new profession.

renelmiller0120 · Oct 30, 2012, 10:02 PM

I don't think I proposed anything. Sorry.

AtlantaTaxExpert · Oct 31, 2012, 07:11 AM

Here is your exact quote:

1. Do I have to pay taxes quarterly? This would be a good idea; you may not owe any taxes but when you file at the end of the year it would be nice to get some back or if you do end up owing then you won't be penalized for not filing.

The item in red sure looks like you are proposing for him to pay quarterly taxes to me.