Curiosity killed the cat, but the satisfaction of its discovery brought it back.
I went to school for accounting; I took tax classes. I hated it. Our professor told us the one thing he hoped we would get out of the class was: “hire a tax accountant to do your taxes.” For real. So my grasp on taxes is shaky. I know enough to terrify myself. I know enough to know that I’m doing something wrong, but not enough to know how to do it right.
But it’s working Wednesday and I needed something to do. So I’m researching taxes.
I started at IRS.gov. I feel like they’re trying to be helpful, but it still makes my head hurt. I found this link on figuring out if you’re subject to self employment income. I tried to take it on my phone. Then I lost data and had to take it later. I have MANY questions. I mean…I go to church, does that mean I’m a member of a religious order? Am I a sole proprietor? Who uses the word proprietor in real life?
Ultimately, it told me that I don’t owe self-employment tax because I chose hobby, but I also chose Other because there are things I do that I don’t consider a hobby. Like odd jobs. House sitting, cleaning, stuff like that.
So I went on to Publication 334 (which is just such a bureaucratic name) and basically, if I make over $400, I have to pay self-employment taxes.
But…then how? I mean, I am so used to the go to an accountant (I took my professor’s advice) in February or March and give them my W2 and whatever really basic forms are needed and be done with it thing. If someone’s not making my form for me (like my employer) where do I even start? I REALLY want to do things the right way.
So I Googled. I really wanted to do everything through IRS.gov…but I just couldn’t. I found THIS SITE which made me feel a little better. It listed out how to account for odd jobs. There’s the Schedule C and and EZ. You fill out the simpler one (EZ, obviously) if you made under $5,000. Anything above, and you’re onto the more complex one. Oh, also, if you do handyman work one day and babysitting another, you have to fill out a new form FOR EACH TYPE OF JOB YOU DO. My future accountant is going to LOVE me.
But that’s only the beginning of the forms. Because that’s just for figuring out your profits (I think?). THEN THERE’s THE Schedule SE (1040) that you fill out to put on your normal 1040. I read the instructions which didn’t tell me when I need to file or how often. From some prior experience, I know that a lot of people file quarterly or monthly. But I don’t know why.
I will continue untangling this web, hopefully next week. I feel (a little) better having done some research. It’s not Mount Everest, but it’s still a pretty steep hill.
Also, now I know I need a printer. Or a scanner. Or to start handwriting invoices.