1. What is Self-Employment(SE) Tax? 2. What schedule is SE tax reported on? 3. What portion...

1. What is Self-Employment(SE) Tax?

2. What schedule is SE tax reported on?

3. What portion of SE tax is deductible on page 1 of Form 1040 (for AGI deduction)? What line number?

4. IRS is enforcing penalties for failure to issue 1099 to payee. Why is 1099 important to IRS? and the payee?

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Expert Solution

1-SELF EMPLOYMENT TAX

Self employement tax are those tax which is paid by a person who considered as self employed person.It is the tax that paid by small business person to the federal government for medicare and security.when an individual's tax is more than $40, then he is subject to pay tax for the year.

2-it is reported on Schedule SE (Form 1040 or 1040-SR)

3-tax payer can deduct the employer-equivalent portion of your self-employment tax in figuring your adjusted gross income.There should be a Social Security Number(SSN) and an Individual Tax Payer Identification Number(ITIN) for paying the self employement tax

4-Every Form 1099 includes the payer's employer identification number and the payee's Social Security number. The IRS matches Forms 1099 with the payee's tax return.

it saves all information related to payment,what type of income it is,tax related matters etc.These are benefited to both payer and payee

ekkarill92 answered 1 year ago

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