The Department of Treasury's Bureau of Fiscal
Service (BFS), which issues IRS tax refunds, has been authorized
by Congress to conduct the Treasury Offset Program (TOP). Thus, through this Treasury Offset Program (TOP), your
refund or overpayment may be reduced by BFS and offset to pay
Past-due child support and other federal agency non-tax debts. Also, TOP is
used to offset state income tax obligations and certain unemployment
compensation debts owed to a state for compensation that was paid due to
fraud or for contributions owing to a state fund that were not paid due to fraud. BFS will send you a notice if an offset occurs.
The notice will reflect the original refund amount and the your
offset amount. You will receive amongst other things, the name, address and
the telephone number of the agency receiving your money.
Self-Employed Individuals
Generally, you are self-employed if
you carry on a trade or business as a sole
proprietor or an independent contractor. You are also self-employed
if you are a member of a partnership that carries on a trade or
business.If you
are otherwise in business for yourself, you are self-employed.
As a self-employed individual, generally you are
required to file an annual return and pay estimated tax quarterly.Self-employed individuals generally
must pay self-employment tax (SE tax) as well as income tax. SE tax is a
Social Security and Medicare tax primarily for individuals who work for
themselves. It is similar to the Social Security and Medicare taxes withheld
from the pay of most wage earners. In general, anytime the wording
"self-employment tax" is used, it only refers to Social Security and
Medicare taxes and not any other tax (like income tax).
Before you can determine if you are subject to
self-employment tax and income tax, you must figure your net profit or net
loss from your business. You do this by subtracting your business expenses
from your business income. If your expenses are less than your income, the
difference is net profit and becomes part of your income on page 1 of Form
1040. If your expenses are more than your income, the difference is a net
loss. You usually can deduct your loss from gross income on page 1 of Form
1040. But in some situations your loss is limited. You have to file an
income tax return if your net earnings from self-employment were $400 or
more. If your net earnings from self-employment were less than $400, you
still have to file an income tax return if you meet any other filing
requirement listed in the Form 1040 instructions.
Estimated tax is the method used to pay Social
Security and Medicare taxes and income tax, because you do not have an
employer withholding these taxes for you. Form 1040-ES, Estimated Tax for
Individuals, is used to figure these taxes. Form 1040-ES contains a
worksheet that is similar to Form 1040. You will need your prior year’s
annual tax return in order to fill out Form 1040-ES.Use the worksheet found in Form
1040-ES, Estimated Tax for Individuals to find out if you are required to
file quarterly estimated tax.
Form 1040-ES also contains blank vouchers you can
use when you mail your estimated tax payments or you may make your payments
using the Electronic Federal Tax Payment System (EFTPS). If this is your
first year being self-employed, you will need to estimate the amount of
income you expect to earn for the year. If you estimated your earnings too
high, simply complete another Form 1040-ES worksheet to
