What Are The Different IRS Tax Forms?

What are the different IRS tax forms? There are many different tax forms to fill out when filing your taxes. A 1040 is an employee tax return and that means that you work for somebody. Now a person that...

A 1040 is an employee tax return and that means that you work for somebody. Now a person that is self-employed, like a contractor, is a sole proprietor. He files a 1040 also but his has a schedule C attached and the schedule C is his business. He will have so much income that he received and its called non-employee income. It is 1099 income and then he will list all of his expenses that he had to do those jobs and then what's left over is his net income that he pays taxes on. By the way, I didn't mention this, self-employed people not only pay regular income taxes, but they also pay 15.3% self-employment taxes. Now as an employee, it's called social security. 15.3% is social security, but with the company he works for pays half of it and he pays half of it. If you are self-employed, you pay the whole 15.3%.

Here is the way employees get in trouble: employees go in and tell the employer to claim exemptions or dependants. Well, the employer is not responsible for whether you really have exemptions or dependants or not. So here is a single guy and he claims a dependant, which means that the employer withholds very little tax. Well when end of the year comes up and when he files a tax return, he will only file for himself when that tax return is filed, he is going to owe a lot of money and this happens in divorce cases a lot of times. When they come out of divorce, they don't have any money and so they claim a dependant so that they don't get taxes withheld out of their checks. And then when it comes tax return time, they owe the money and they don't have it. You see what I am saying? Again, it might take the IRS two or three years before they start getting after them. But they are coming; it's just a matter of when.

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