First time 1099-MISC questions


S

sgupta

We are likely to have a very complex tax situation for this
year and wanted an input.

We moved from MA to Pennsylvania in August so I can attend
school in PA. My wife started a job in late October that is
paying her in 1099.

Given that I am a student, we believe we have enough
deductions and prepaid icnome tax through August that we
will not need to pay any additional taxes even if we
included the 1099 income for this year.

However the thing that is throwing me off is the
self-employment tax. Do I have to file an estimated tax
payment just to account for this payment (even though we
would have a refund overall in 2005). Secondly since I am
here as a student for 2 years only we are filing as
non-domiciled in philadelphia.

Which state would I own taxes on for her pay- MA or PA?
would I have to make any self-employment taxes to PA or MA?

any clarity would be greatly appreciated

thanks

viper
 
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E

ed

You'll file part year resident tax forms for both state, and
a federal 1040, or possibly as resident of MA wnd
non-resident for PA, but PA will get the tax on wife's job
and MA will give you a credit for paying PA tax. The SE
tax is only on your wife's 1099 income and expenses on
Schedule C, and yes, it is included in computations for
underpayment penalties on form 2210. But if you will have
withheld more than 90% ( or within $1,000) of your total tax
liability, including the SE, there will be no penalty and
you don't have to pay estimates. Since States don't have
SE tax it is not included in their underpayment nor tax
computations.

ed
 
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S

sgupta

Thanks for your response. Since on 1099 no state taxes are
withheld am I supposed to make estimated tax payments to the
state of PA also? Since I have not paid any taxes to PA even
though overall the government owns me taxes I will own taxes
specificall to PA

thanks

viper
 
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G

Gary Goodman

(e-mail address removed) says...
Thanks for your response. Since on 1099 no state taxes are
withheld am I supposed to make estimated tax payments to the
state of PA also? Since I have not paid any taxes to PA even
though overall the government owns me taxes I will own taxes
specificall to PA
You should pay 3.07% of the 1099-MISC income to
Pennsylvania.

You don't say much about your wife's job, but since (in my
experience) it's more likely that she is an employee than a
true independent contractor. I recommend that you look at
Form SS-8 http://www.irs.gov/pub/irs-pdf/fss8.pdf to see if
your wife is being "cheated" by her "employer".

Gary
 
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P

Paul Thomas, CPA

We are likely to have a very complex tax situation for this
year and wanted an input.

We moved from MA to Pennsylvania in August so I can attend
school in PA. My wife started a job in late October that is
paying her in 1099.

Given that I am a student, we believe we have enough
deductions and prepaid icnome tax through August that we
will not need to pay any additional taxes even if we
included the 1099 income for this year.

However the thing that is throwing me off is the
self-employment tax. Do I have to file an estimated tax
payment just to account for this payment (even though we
would have a refund overall in 2005).
If your total tax payments/withholding is sufficient, no
aditional estimated tax deposits need to be made.
Secondly since I am here as a student for 2 years only
we are filing as non-domiciled in philadelphia.

Which state would I own taxes on for her pay- MA or PA?
Pennsylvania.

would I have to make any self-employment taxes to PA or MA?
If any, Pennsylvania. I'm not aware of any state that
imposes a "self-employment" tax, although she may have to
file for, and/or pay some other business taxes, like a
business license, etc. Check with the locals (county/city,
etc) to see if this is the case.
 
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