Quote:
Originally Posted by secluded
#1;This is clearly below the poverty level, and I'm pretty sure I qualify to not pay taxes. However, when my dad did my taxes for me, it showed me owing $300-something for the self-employment tax. My question is, do I really have to pay this? I understand that independent contracting taxes are different as the employer does not withhold anything for you. However, I was under the impression that if you made under a certain amount, you did not have to pay taxes. Obviously I will get the taxes I already paid refunded, but it seems silly to have to pay more.
#2;I am filing as independent. Oh, and one more thing - my total deductions on the year were actually more than my total income... Can anyone help guide me here? My dad used TurboTax to help prepare my taxes, so I'm thinking the program just doesn't know what to do about my situation. |
#1; basically, I should say it depends; I mean aslongas the amount reported on Sch C line 29, 31 ( I MEAN NET EARNINGS from your freelancing job) is $400 or exceeds $400 then you must file return regardless of getting refund or paying tax liability; also aslongas the amount on Sch SE line 2, 3 is also $400 or exceeds $400 then you must pay self employment tax to the IRS but you can deduct 50% of your SECA tax on 1040 line 27. So, In general, if you are filing as a sole proprietor, and/or a self-employed individual, you generally have to make quarterly estimated tax payments if you expect to owe tax of $1K ( I mena after subtracting credits/deductions) or more when you file your return.HOWEVER, You do not have to pay estimated tax for the current year, if you had no tax liability for the prior year( no return filed lat year I mrean); You were a U.S. citizen or resident for the whole year; Your prior tax year covered a 12 month period.
#2;as mentioned above. Aslongas the amount on SCh C line 29, 31 is $400 or exceeds $400 you must file return even if your deductions exceed your total income;however, your tax liaibility after credits/dedcutions is les than $1K, then you do not need to pay quarterly estimated taxes to IRS/state