I have been wondering if my taxes are done right. Do designers that work under a business name and federal tax id receive 1099′s from there clients? Or, is there another way that the client is to account for the fact that they hired “your business” to provide a service to them. Two of my clients have provided 1099′s to me and put the dollar amount in Nonemployee Compensation and I’m confused.
Anita – if I were you, I’d consult with a tax accountant. I can’t speak to the web design business, but my husband does freelance photography. He receives 1099s from some clients, but not others. I doubt you will receive 1099s from individuals (bloggers) for example, but most formalized companies (corporations, etc.) document how they pay out money, and if it involves paying consultants, etc., they will create a 1099.
Being self-employed, you’ll pay taxes in a different manner than someone who is a “regular” W2 employee. For example, there are quarterly estimated taxes to be paid, and if you’re not submitting them to the IRS regularly, you can be penalized.
Thanks Susan. You are right, not everyone has given me one. I have received 2 total. I did my own taxes in the past but I think I need a professional now!
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