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Taxes are the responsibility of all American citizens and residents. By keeping good records and having all necessary documents available at the time of filing, the process can run much smoother. While it is recommended to use an accountant for tax preparation, you can use tax computer programs. Government online resources are available as well.
Our community has a general idea that we will have to owe the government after filing taxes for our income from studies. This is a common misunderstanding, holding us back from filing taxes. It doesn't necessarily mean you will have to pay taxes; even if your only income is from doing studies you may get a refund. There are many things that factor in when calculating deductions.
IRS looks at you as an individual person, conducting business as an independent contractor or as a sole proprietor, reports the income and expenses of the business activity on a Schedule C. Any type of business activity can be reported on a Schedule except for farming (Schedule F) and rental activities (Schedule E). On the Schedule C, the individual reports total business income from all sources, reports various types of business expenses, and calculates the net profit or loss for the business. The net profit or loss is carried to Form 1040, line 12. As a self-employed person, you must also calculate the Self-Employment Tax using Schedule SE. Also Known As: self employment income, schedule C income, sole proprietor income. This is why you fill in a Form W-9 when you sign up for a study.
Research facilities keep track of your earnings each year. They send a statement of your earnings to you and to the IRS for that calendar year. This is called Form 1099. This form is also used to account for interest, brokerage accounts, and dividends. This form is the reason why it is necessary and highly recommended to hire an accountant to handle tax filings to ensure all deductions and credits are maximized.
I prepared this site to share some facts. You can find details about filing your taxes and how you can reduce your tax bill. You can also contact us and we can handle it all for you. Take a look at our Privacy Policy to see how we handle the information you share with us.
To find out about participating medical research studies go to www.jalr.org or www.drugspay.com
To find out how you can make 20 bucks by referring your fellow lab rats click here
If you live in the Greater Austin area and you believe you didn't make enough money to pay an accountant to prepare your taxes you can visit Foundation Communities.