tax question

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hemi_newman

Active member
Ok its that time of the year..Taxes. So I know I have to report my earnings at my full time job. My question is..I am a Volunteer Firefighter, paid on call, I made $2,400 from the fire dept this year. Do I need to also report this income? No federal was taken out and I have my deductions at 0. So I have a feeling good Ol Uncle Sam is going to nail me if I have to report the $2,400 and no federal was withheld. Thanks guys.
 
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dawolf

New member
You've got to report it unfortunately. Keep track of any unreimbursed expenses along with your mileage and if they exceed 2 pct. of your AGI you might be able to deduct those to lessen the sting a bit.
 
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chicagosledder

New member
Make sure you deduct your fuel, mileage on your truck or car (depreciation), your clothes, study material for firefighting (books, etc.), gym membership, cell phone bill, laudry detergent and dry cleaning to name a few. The government takes enough from us, you might as well get what you can in return.
 
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hemi_newman

Active member
Not the news I was looking for, I did not keep track of my Mileage responding to the fire hall, or other expenses related to the fire dept. I use to get a refund and now it looks like I have to pay in. My wife works claiming 0, my fulltime job I claim 2.(we have one child at the age of 6). I joined the fire dept to save lives and now it looks like I made a mistake. Yes I worked longer hours at my fulltime job than 2015. we bought a house this year(first time buying house) and it looks like that credit is gone. I was using TurboTax to see what I was getting back/paying in. I'm now going to go to an accountant and hope for the best.
 
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dawolf

New member
hemi_newman said:
Not the news I was looking for, I did not keep track of my Mileage responding to the fire hall, or other expenses related to the fire dept. I use to get a refund and now it looks like I have to pay in. My wife works claiming 0, my fulltime job I claim 2.(we have one child at the age of 6). I joined the fire dept to save lives and now it looks like I made a mistake. Yes I worked longer hours at my fulltime job than 2015. we bought a house this year(first time buying house) and it looks like that credit is gone. I was using TurboTax to see what I was getting back/paying in. I'm now going to go to an accountant and hope for the best.
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If you're eligible you could throw the money in a deductible IRA or Health Savings Account and it would come off your taxable income for 2016 as long as you do it by the April deadline. Ask your tax person if you qualify. Talk to him/her about what to do with the extra money in 2017 to prevent any issues in'17.
 
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Cirrus_Driver

Guest
Yes, when you get a 1099, it's reported to the feds, so you have to report on your return.
I am also an accountant. As others have said, you can contribute to a Roth or regular IRA now, and still deduct on 2016 taxes.
 
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hemi_newman

Active member
Why wasn't any fedaral taken out is my next question? We get paid in June and again in December. The 2nd half we had a high call volume. I'm not a money/tax person is why I'm a asking.
 
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dawolf

New member
hemi_newman said:
Why wasn't any fedaral taken out is my next question? We get paid in June and again in December. The 2nd half we had a high call volume. I'm not a money/tax person is why I'm a asking.
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They must consider you a contractor instead of an employee. Its actually a good thing if you plan accordingly. Talk to a real tax person and they'll square you away.
 
garyl62

garyl62

Active member
hemi_newman said:
Not the news I was looking for, I did not keep track of my Mileage responding to the fire hall, or other expenses related to the fire dept. I use to get a refund and now it looks like I have to pay in. My wife works claiming 0, my fulltime job I claim 2.(we have one child at the age of 6). I joined the fire dept to save lives and now it looks like I made a mistake. Yes I worked longer hours at my fulltime job than 2015. we bought a house this year(first time buying house) and it looks like that credit is gone. I was using TurboTax to see what I was getting back/paying in. I'm now going to go to an accountant and hope for the best.
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Good luck, from what you're saying it would sound like you have some decent deductions (mortgage interest, any points you paid, real estate taxes) that you haven't had before and with the withholding of 0 and 2 it would seem like you would have enough withheld that it would have covered that much added income, but see a tax person and have them look into it. You should still be able to back into some the deductions if you look back at when you got called in, how much the uniforms were etc
 
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Cirrus_Driver

Guest
Yes, as dawolf said, it sounds like you're a contractor and self employed, which means they report payments to the government, but it isn't your customers job to withhold taxes.
When you're self employed you should be paying estimated quarterly taxes based on prior years earnings, (or actual, if you keep track) or not only will you pay all the taxes on your federal return, but you may be subject to penalties as well. Gov doesn't like it when you don't pay them on time.
 
garyl62

garyl62

Active member
XXX007 said:
Yes, as dawolf said, it sounds like you're a contractor and self employed, which means they report payments to the government, but it isn't your customers job to withhold taxes.
When you're self employed you should be paying estimated quarterly taxes based on prior years earnings, (or actual, if you keep track) or not only will you pay all the taxes on your federal return, but you may be subject to penalties as well. Gov doesn't like it when you don't pay them on time.
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But as long as you paid in an amount equal to your total tax paid last year you'll be fine. I think the penalties only happen if you pay in less than your tax bill was the previous year, or if you don't pay at least 90% of what you owe. As long as you have done one of these you should be ok
 
chords

chords

Active member
XXX007 said:
Yes, when you get a 1099, it's reported to the feds, so you have to report on your return.
I am also an accountant. As others have said, you can contribute to a Roth or regular IRA now, and still deduct on 2016 taxes.
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Roth contributions are AFTER tax and not deductible. Just sayin
 
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Eagle River Mike

Member
Report the $2400 on a schedule C and then deduct your expenses against it. No 2% floor doing it that way. 2% floor is for unreimbursed employee business expenses. Since you got a 1099 instead of a W-2, that means you are not an employee and are being treated as an independent contractor for tax purposes. Under the Cohen rule, you are allowed to estimate your expenses if they can be supported by other facts and circumstances. For example, you did not keep track of the mileage to and from the fire house. However, if you know its 10 miles round trip and you went there an average of 2 times a week, you would have 1040 miles worth of business expenses. The standard mileage rate is 54 cents per mile. As such, you would have a supportable travel expense of $562 (1040 miles times 54 cents per mile). You should be able to get your taxable income from firefighting down to a negligible amount.
 
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dawolf

New member
Eagle River Mike said:
Report the $2400 on a schedule C and then deduct your expenses against it. No 2% floor doing it that way. 2% floor is for unreimbursed employee business expenses. Since you got a 1099 instead of a W-2, that means you are not an employee and are being treated as an independent contractor for tax purposes. Under the Cohen rule, you are allowed to estimate your expenses if they can be supported by other facts and circumstances. For example, you did not keep track of the mileage to and from the fire house. However, if you know its 10 miles round trip and you went there an average of 2 times a week, you would have 1040 miles worth of business expenses. The standard mileage rate is 54 cents per mile. As such, you would have a supportable travel expense of $562 (1040 miles times 54 cents per mile). You should be able to get your taxable income from firefighting down to a negligible amount.
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ER Mike is right...
 
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snobuilder

Well-known member
Check with your fellow fire fighters that have been doing this for awhile. They no doubt have the deduction thing down to the penny. ....I would think any training, dedicated clothing, etc. would come into play.
 
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