Should dependent student (20 yr.) file the Federal tax return for his 1099-Misc income ($4200 in box 7, no taxes taken) and W-2 ($230)? Should he file Alabama taxes?

Nick7 · ‎June 4, 2019

My son is a full time undergraduate student (20 years). We claim him as a dependent. He worked as a student assistant at hospital and received $4200 in 2016. He got a 1099-Misc form with the amount in the box 7. No taxes was taken.. He also got a W-2 form from other place for $230. Does he have to file his Federal and Alabama (place of residency and work) tax returns?

I tried to fill Federal taxes in TurboTax. The income is less than amount of Standard Deduction (applied), but TurboTax still shows about $600 in Federal taxes due? This is confusing.

MinhT · ‎June 4, 2019

Income reported in box 7 of form 1099-MISC is self-employment income and is subject to self-employment tax calculated at the rate of 15.3% on 92.35% of the income. The tax due is only self-employment tax. There is no income tax as taxable income is 0.

The standard deduction reduces taxable income for income tax purposes, but not for self-employment tax purposes.

He also has to file an Alabama tax return as his gross income exceeds $4,000.

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MinhT · ‎June 4, 2019

Income reported in box 7 of form 1099-MISC is self-employment income and is subject to self-employment tax calculated at the rate of 15.3% on 92.35% of the income. The tax due is only self-employment tax. There is no income tax as taxable income is 0.

The standard deduction reduces taxable income for income tax purposes, but not for self-employment tax purposes.

He also has to file an Alabama tax return as his gross income exceeds $4,000.

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**Mark the post that answers your question by clicking on "Mark as Best Answer"

Nick7 · ‎June 4, 2019

Thank you for the answer. I would just like to clarify this for myself once more. Does my son have to file his Federal tax return at all? He is a full-time dependent student. He worked as a part-time student assistant and his gross income is less than $6300. Can he just not file the Federal tax return by law? Can he request to get W-2 instead of 1099-Misc in the hospital he worked?
Thank you, Nick.

MinhT · ‎June 4, 2019

He is required to file a tax return because he has self-employment income over $400. If the hospital had considered him as an employee and paid wages reported on form W-2, he would not be required to file a tax return.
Please read this IRS document under Other Filing Requirements:
<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p929/ar02.html#en_US_2016_publink1000203761">https://www.irs.gov/pu...>

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Should dependent student (20 yr.) file the Federal tax return for his 1099-Misc income ($4200 in box 7, no taxes taken) and W-2 ($230)? Should he file Alabama taxes?