My daughter had $2000 in babysitting income that required a schedule C.
My daughter’s total income was less than $13850 when adding her W2 income to the babysitting income.
We used Turbo Tax to see what we thought would be a refund amount but instead Turbo Tax says we owe $213.
Why wouldn’t Turbo Tax advise that we would be better off not to file since we made less than $13850?
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Child care (or babysitting) income is considered by the IRS as self-employed income.
Your daughter is required to file a tax return when self-employed income exceeds $400. The limit of $13,850 is for wages on a form W-2.
Self-employed income is subject to income tax and self-employment tax which is calculated at 15.3% on 92.35% of the net self-employed income.
Your daughter pays only self-employment tax as her income is below the standard deduction.
Child care (or babysitting) income is considered by the IRS as self-employed income.
Your daughter is required to file a tax return when self-employed income exceeds $400. The limit of $13,850 is for wages on a form W-2.
Self-employed income is subject to income tax and self-employment tax which is calculated at 15.3% on 92.35% of the net self-employed income.
Your daughter pays only self-employment tax as her income is below the standard deduction.
$13850 limit is for W2 only.
Got it.
Thanks @MinhT1
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