1099-MISC and Small Business Returns 1

What you need Download: for hard copy: 2

What to Expect Working part-time for an employer outside the home. o 1099-MISC, line 7 Working Part-time for an employer in your own home. o 1099-MISC, line 7 Small business owner: In-home daycare, Service person, Home delivery newspaper carrier, etc. o Cash receipts and/or1099-MISC, line7 3

1099-MISC Box 3 and 7 Expenses o Mileage Commuting vs. business travel o Necessary tools or supplies Link to Schedules C and C-EZ Self employment tax 4

Out of Scope for VITA Expenses exceeding $10,000 Business use of home Vehicle expenses reported as actual expenses Depreciation Net losses See Publication 4012 for full listing 5

Small Business Scenario 1 Advanced Topic Anna is employed as an editor, she works from home and was paid on a 1099-MISC She kept a record of all expenses: 6 Expense ItemCost Printer Paper$ Printer Ink$ 1, Business Cell Phone$ Printer$ Computer$ 1, Total Dollars$ 3, Miles while making deliveries234 Miles

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TaxWise Tax Preparation Software 8

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Linking to a Scratch Pad 10

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Everything Transfers to the

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Ohio Self-employment Tax Credit 50% self-employment tax credit on the Ohio tax return. Line 41 on page 3 of IT MISC qualifies Complete Ohio IT SBD form by hand Enter the credit amount as a deduction to income and on line 41 of page 3 OH IR Keep the IT SBD for your records 16

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Ohio SBD Continued 18 8, , ,000 4,121

Entering the Deduction into TaxWise 19

Scenario 2 Raoul is a plumber who has his own small business and occasionally works for a plumber friend who bills the client all charges and pays Raoul on a MISC. In his own business he bills the customer for the service call, labor and all the parts he uses to do the job. He keeps good records on his mileage to and from the customer, as well as all of his expenses. In general Raoul charges all his expenses for tools and supplies to his business. However, if the part time job requires a special tool he will charge it to the 1099-MISC job. Raoul earned $27,500 in his business, and received a1099-MISC from his plumber friend for $6,

Income and Expenses Raoul earned $27,500 in his business, and received a1099-MISC from his plumber friend for $6, Billing Software$ 147 Paper, ink, other office supplies$ 222 Expendable supplies: sealer, solder, tape, etc.$ 207 Pipe threader$ 500 Pipe cutter$ 325 New socket set$ 175 Soldering equipment set$ 130 Heavy duty pipe wrench – 1099-MISC job$ 137 Miles to the business7,500 Miles working with his friend980

Publication 17 Figure 26-B When are transportation expenses deductible? 22

Small Business Scenario 3 LaDonna is an unlicensed at home daycare provider. She earned $8,900 last year. She opens her entire house and backyard to the daycare children. Every Monday, she takes the children to the zoo and has tracked her mileage and other expenses. 23 Food$ 1,200 Games, Toys, Crafts$ 650 Cleaning Supplies$ 240 Tennis Shoes (Only worn while working)$ 90 Total Dollars$ 2,180 Mileage320 Miles