I have a couple of tax return questions. I've looked at the IRS website and it doesn't answer questions cut and dry, so I figured i'd try the great CFBBS source. I don't know any tax accountants. For self-employeed/contract (1099), can I claim both gas receipts and milage? What is the maximum I can make before I have to make a claim. From what I understand, its will be around 9500, but others have told me on up to 13000. Basically I have worked for a friend this year and have not brought in much money this year. He's willing to work with me on what he will file against me so I don't have to pay taxes this year.
First of all, I'd probably edit that last sentence and make it disappear. As to your first question, you can claim the standard mileage rate OR actual expenses.....not both. The standard mileage rate is designed to be an approximation of all actual expenses; the most obvious being things like gas, but it even covers less obvious factors like depreciation of your vehicle. Unless you purchased a truck or an SUV built on a truck frame with a GVWR of 6000 pounds or more in 2006 (think Lexus GX470/Tahoe or Nissan Titan crew cab/American made extended cab or larger), then your best and easiest bet is to probably just use the standard mileage rate. I'm not quite sure I understand the second question (about a claim)
I believe if I read correctly he files a 1099-misc ... stating how much he has paid to me this last year. Most businesses try to file as much of possible of course, so they don't have to pay the taxes. I belive their is a poverty line in which if you don't make xx amount of dollars, then you do not have to file a tax return.
Unless you were selling something whereby you had a cost of goods sold or returns and allowances (I'm assuming you did not), and if you are single and under the age of 65, then you must file a return if your friend submits a 1099 for you in the amount of $8,450 or more. This figure was pulled from publication 17 "Your Federal Income Tax for individuals" http://www.irs.gov/pub/irs-pdf/p17.pdf The $8450 figure is your gross income, and according to publication 17, it should be pulled from line 7 of a shedule C--which you can see with the link below. http://www.irs.gov/pub/irs-pdf/f1040sc.pdf
ok thanks, i've seen the 8500 and the 9500 number throw around in a couple publications. I think I read the federal poverty threshhold was 9500 ... so I suppose the IRS does not use this number.
