@penwright1029 wrote:
Our tax preparer did put the Vine 1099 NEC in as self employment. What doesn't make sense to me is, she gave us a $29,200 standard deduction which came to zero income for us. I'm, possibly, going to add it as hobby this next year. And I'm going to do my own tax return.
If you have a business, you have two separate taxes to think about.
You have income tax. You take the net profit from business, plus all your other taxable income, subtract any deductions, and see if you have income subject to income tax. You don't, because your Vine income is taxable, but your other income is not, so your total taxable income is less than the standard deduction so that comes out to zero income tax.
But if you are self-employed, you also pay self-employment tax (social security and medicare) on your business income. Even if your overall income is so low that you don't pay income tax, you still pay self-employment tax. Think about working a part-time job. If you made less than $29,000 working a small part time job, you would pay no income tax, but you would still pay social security and Medicare tax (automatic withholding from your paycheck). That's what self-employment tax is, and that's why you pay self-employment tax on business income even if your overall income is too low to pay income tax.
