1099 Contractor Tax Questions....?

1099 Contractor Tax Questions....?
Hey folks, I'm awaiting a response from my tax professionals, but figured I'd fire this off here. Alright for 2008 I was a 1099 in an overseas Independent Contractor position. I was gone for 330 Days (meeting the $87500 thingy), my 1099 lists my non-employee compensation as $185000 after a 10% completion bonus, and I have an estimated $27000 in deductions (clothing, training, things I needed to do my job). I'm single and don't have any mortgage, no dependents, I'm hardly in the US doing what I do, so there's really no need for a house just yet. I did not pay into quarterly taxes, so I'm sure I'll take a hit. An extension has already been filed, but I will be stateside again in a few days and want to get this taken care of. So basically am I looking at a taxable income of about $71000 after those deductions or exemptions? Unfortunately I'm a resident of NY State, so God only knows what they'll want. Any estimates, ballpark if at all, of what I'll owe Fed-wise? Any information as to how this all works and or recommendations/estimations are greatly appreciated in advance! Thanks! - I'm working in Iraq. So yes I'm out of the country. We've always gotten 1099-MISC, most companies run that way, but some do intermittent employee status and pay half your social security and medicaid (not mine though). There are some grey areas and disputes over what we actually should be considered, but I don't want to get into that with this question. - Believe me, it confuses the crap out of me too! :) - You all are awesome. Thank you for taking the time to help with this. I'm going to let the question run its course for anyone else that wants to jump in, but this is far more valuable help than I expected so far. Thanks!


Answers:

Chosen Answer
123456789:  Very confused by your post. While you would most likely meet all of the requirements for tax benefits, the income exclusion (87,600 for 2008) applies only to foreign earned income. Why did you get a 1099-MISC? Is the $185,000 earned considered to be foreign income? Did you pay foreign tax to another country while you are outside of the US?
2009-07-05 17:42:56
zeuz:  Yes, you'll have taxable income of about $71,000 because you met the physical presence test (I ASSUME YOU WERE IN ANOTHER COUNTRY, AND NOT ON AN OFFSHORE OIL RIG) However, your TAXES will not be based on $71,000 of taxable income. Rather, your tax rate will be based on the AGI of approximately $185,000 (actually lower) applied to the taxable income of $71,000.
2009-07-05 17:43:03
v b:  Ouch, did you pay *any* estimated taxes at all? It's after 6/15, so you are late filing. The extension will help with the Failure to file penalty, but *not* the ETP or FTP or interest. Any taxable income after the exemption is taxed at the higher tax rate, so it's likely to be 25%. That's $17750. You will still owe SE tax, exclusion or no. That's 15.3% up to around $100K and then 3% after that. Figure another $16K Firgure another $1-2K for estimated tax penalty.
2009-07-05 20:12:59
Ali M:  Here is an estimate on how much tax you will have to pay, assuming that you did not pay any Foreign Income Tax. Total income $71,000 1/2 SE Tax Adjustment $5,016 AGI $65,984 Standard Deduction $5,450 Personal Exemptions $3,500 Taxable Income $57,034 Tax $10,602 SE Tax $10,032 Total Tax Due $20,634 Since you did not prepay any taxes, you will have to pay interest & penalty. Questions, e-mail tax.eezi@gmail.com
2009-07-06 07:54:32