henryle95
New Member

Worked as an independent contractor, TurboTax shows I owe federal $204 but also shows I owe my state $0. Confused.

I have only been an independent contractor for 2018 and I'm not sure if how much I owe is correct. My compensation is $1503 and I owe federal $204 after deductions. Would I really owe my state nothing at all? State is also California.

PhyllisG
New Member

Get your taxes done using TurboTax

Yes.  The federal tax bracket and filing requirements do differ from the state of California. 

As an independent contractor you are required to file a Form 1040 Schedule C or a Schedule C-EZ if your income is $400 or more. You are then allowed to deduct expenses that are related to your business.  If the net amount of your business income equals $400 or more, then you are subject to self-employment tax.  This could be one of the reasons the end result differs because California does not have a self-employment tax. Or, it could simply be your tax liability (taxes you were required to pay) met California's threshold.  This would also result in -0- taxes.

Another reason that you may owe taxes is if you received a penalty for not having the required health insurance under the Affordable Care Act.  The penalty is a federal only penalty.  It is not assessed by California.  

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