I am 72, retired with a limited income, Social Security and retirement plan. I took a part time job delivering a newspaper to convenience stores and to the post office (to mail out) to make a little extra income. When I enter this where Turbo Tax tells me to, I find that I am being treated as a "business" and I now also have to pay self-employment tax on this income. Is there a loop around this? Doesn't seem fair or right in my mind. Is there somewhere else I can report this as income so I am only paying withholding tax on this income as I do on my retirement plans?
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It is considered self-employment income and should be reported on Schedule C as TurboTax is doing. You are responsible for the self-employment tax on self-employment income as you are both the employee and employer. However, you are entitled to deduct all of your business-related expenses in connection with the income, including automobile mileage. Your expenses will reduce the taxable amount of income you have to pay tax on. If you are still working delivering papers, you can make estimated tax payments to the IRS (or increase your retirement withholding) during the year so that you are not stuck with a tax bill come tax filing time.
Where do I enter my business expenses? There is a link at the bottom of this article that lists the types of deductions you can take.
It is considered self-employment income and should be reported on Schedule C as TurboTax is doing. You are responsible for the self-employment tax on self-employment income as you are both the employee and employer. However, you are entitled to deduct all of your business-related expenses in connection with the income, including automobile mileage. Your expenses will reduce the taxable amount of income you have to pay tax on. If you are still working delivering papers, you can make estimated tax payments to the IRS (or increase your retirement withholding) during the year so that you are not stuck with a tax bill come tax filing time.
Where do I enter my business expenses? There is a link at the bottom of this article that lists the types of deductions you can take.
Thank you for your response. That is what I was also thinking, but wanted verification from another source, in case I may have missed something I was not aware.
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