My son will owe taxes to pay for federal and state

[vpujols]

Once he files by April 15, when he must submit payment?

We live in CT.

He owes about 700 bucks federal and just 30 bucks for the state; and is asking me if he make installed payments and for how long.

Thanks much for the help..!!

[ee-ea]

Late payment penalty starts on April 15.

[vpujols]

@ee-ea thanks for the response.

One last quick Q.

He received a 1099-NEC from a guy he does work on the side for car wrapping.

It seems like sometimes this form can be included in TT as a miscellaneour income and not 1099-NEC.

At the same time that work he does may faill into a self-employed bucket hence 1099-NEC may be the right form to complete, but my son does not have a business per sa.

Would it be better completing this as MISC income to report it?

[Vanessa A]

He received a 1099-NEC from a guy he does work on the side for car wrapping. The fact that this is for side work means he should have received a 1099-NEC and not a 1099-Misc.  He is acting as an independent contractor.  So, his income is subject to self-employment taxes.

You don't have to have a business to be considered self-employed.  To be self-employed all you have to do is earn money by providing services to someone who does not control the how, what, when, where, etc. 

Am I considered Self-Employed

[vpujols]

@Vanessa A understood.

The problem completing form 1099-NEC using TT Deluxe is that it will then force you to enter info for the "business" (how is accounting, for example) and my son doesn't have all that info. 

I added it using 1099-NEC and now the money due is more than double..!!! 

I had entered the income as a MISC and the money owed was over 700 dollars.

I removed this income. Instead entered as 1099-NEC and now amout due is over $1,600

Does that sound correct? I know everyone's tax situation is different but wanted to know why the big difference...!!

[Vanessa A]

If you are self-employed, you will need to upgrade to Premier Online or Home and Business if you are using the desktop version, if you want the guided interview questions. 

He is a cash basis tax payer, that would be the accounting method.  All the info is basically his info, so he does have it all.  Anything that doesn't apply you just leave blank.  The reason his amount due doubled is because he is subject to  SE taxes of 15.3%.  So yes, that does sound correct.

When you are an employee, your employer pays half of the Social Security and Medicare taxes and they withhold the rest from your pay.  Since he is not an employee, he has to pay them all.  

[vpujols]

@Vanessa A 

One more question. Since my son does not have an LLC or business created, how can I complete now the Turbotax question about EIN and other business info?

He doesn't have an EIN and wonder if I should just leave blank and submit his taxes without one, the TT smart check is warning me this info needs to be completed.

Thank you again..!!

[Vanessa A]

Your son does not need an EIN.  Is it asking for the EIN on the 1099-NEC?  It may want a business code, which can be looked up using the link next to the box asking for the NAISC code.  This code does not affect anything it is strictly for statistical purposes. 

As an independent contractor, there is no requirement for an EIN.  

Do you need an EIN?

[VolvoGirl]

To report self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You can fill out Schedule C and enter Self Employment Income into Online Deluxe but if you have any expenses you will have to upgrade to Premium version. Or buy any of the Desktop programs. All the Desktop programs have all the same forms, but you will get the most help in the Home & Business version.

You use your own , address and ssn or business name and EIN if you have one. You should say you use the Cash Accounting Method and all income is At Risk. 

TAX

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment. You pay 15.3% SE tax on 92.35% of your Net Profit (If it is greater than $400). The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare (FICA). So you get social security credit for it when you retire.

Is he your dependent?  How old is he and is he a full time student?  

[vpujols]

Yes it is also asking for a Principal business code. I picked one random one from the table.