If I post a tax question, will I get any responses, and if so...

[jab105]

will they mostly be sarcastic, cynical, mocking, derisive, and smarmy as usual, or is it actually worth the time?

In case of the latter, the question involves filing a separate business return vs combining the business into 'other income' on my individual tax return.

Example--
I make $20k at my job (W2) and $50k at my business. If I combine, my total income is $70k, with all appropriate tax brackets

BUT...if I file separately, would the first $20k (or whatever the lowest tax bracket is) be taxed at the lower percentage, or will it just be tacked on to my W2 return? i.e., would there be any advantage to filing these separately?

I understand DU isn't the best place for these types of questions, but rather than wasting a day or so finding the 'DU of tax talk', I thought I'd give it a shot, I mean someone here has got to know something about taxes...THANKS!

[NightWatcher]

1. I think that you have to combine them

I'm no expert but I just did mine.

On lines 7 and 12 of 1040 it looks like you have to claim all income at one time and not seperate.

[jab105]

2. yeah, I see that

thanks for the reply, I understand that, but I've been told I can file a 'Schedule C' for my business, whatever that is...I'm pretty sure I can file them separately, I'm just not sure if there would be any advantage?

[NightWatcher]

3. schedule c is just for calculating expenses and losses from your biz

it all has to come together after that.

I used C to calculate mileage and other expenses, but I had to add my profit to my individ income on the 1040 and file it all together.

[lizziegrace]

5. The Schedule C is a place to capture income and expenses

as NightWatcher said. The net income or loss from the Schedule C is carried forward to the front page of the 1040. From there, it's included in your Adjusted Gross Income and eventually the taxable income.

[Gormy Cuss]

9. Schedule C allows you to reduce the amount of that 50K that counts as your income

if you have deductible business expenses. It's not a separate return for your business, it's still part of your individual income tax return. It's a schedule for the 1040, just as there is a schedule for itemized deductions. Your business sounds like it would be treated as self-employment income.

There are ways to define a business so that it doesn't get treated as self-employment (incorporation, for one) and thus the business return would be separate, but unless you've already done this you may be stuck for this year.

Not expert advice, just the opinion of someone with years of similar income reporting.

[lizziegrace]

4. You can only separate income

if you're married and filing separate returns or if your business is a corporation and you took no salary from the corporation. Then the corporation would pay tax on the profits of that entity. Based on what you've said, it's all your income and must be filed on the same return.

[jab105]

6. Ok, kinda what I thought :(

Thanks a bunch for the info, it's much appreciated!

[lizziegrace]

7. Not a problem

I wish it was better news. :(

[NightWatcher]

8. just take it like the rest of us

I just got hammered less than an hour ago with mine.