Quote:
Originally Posted by no_worries
GMAN, hate to disagree but I can't see how you'd ever have less tax liability being paid on a 1099. At a bare minimum your liability would be exactly the same as your income is what it is no matter how you're paid. Most likely you'd owe more since your liable for self-employment tax. It is true that your withholdings will be less, but just because you're having less withheld does not mean you're paying less in taxes.
I agree with Rev on the H&R Block. There reputation is far from sterling when it comes to tax prep. That's not to say there aren't individual offices that do a good job, but the company-wide rep isn't great among those in the know. With anything other than a basic 1040 I'd go to a CPA unless you're knowledgeable enough yourself to monitor a tax prep's work.
But hey, that's just one opinion :lol:
I have used a corporate structure most of my life, so my situation is different. However, as I recall if you report the 1099 income as wages, then it may be necessary to pay self employment tax on the entire amount. If it is reported as business income or other income then you may not have to pay the self employment tax or may only have to pay the tax on the net after deductions. Income tax is payable on the net after deductions. Since I am not a tax professional I recommend you consult with one. Everyone is different. I don't want to pay these people any more money than is absolutely necessary. In any case, that is what I was referring. If I remember correctly you only pay self employment tax on wages.
As far as H & R Block is concerned, I have never used them. However, I know a small fleet owner who has used them for years. Apparently, he is pretty satisfied with them. Personally, I prefer a CPA. There are some good public accountants who work with trucking companies. I know of one locally who works with them and is highly regarded. In fact, he works with one carrier who has about 100 trucks. I think it is a matter of finding someone who is familiar with this industry, regardless of what they have behind their name. However, an individual's taxes should not be that difficult for most people who regularly do taxes. There are tax software packages that are supposed to be good. From what I understand, all you need do is plug in the numbers. It asks questions, you answer and the software does the rest.
The IRS has a website where you can get forms and instructions for about everything. I believe it is
www.irsforms.com? You may find the answer you seek on their website.