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Self employed
When a taxpayer is self-employed, the income is subject to both income tax and self-employment taxes. The self-employment taxes are 15.3% (Social Security is 12.4% and Medicare is 2.9%) of your profit (income minus expenses). The income tax rate for the taxpayer is determined by their filing status and income. In your daughter’s case it is 10% if her taxable income is under $10, 275 and she is single. Note, if she has self-employment income, she will pay both income tax and self-employment taxes on it.
When you enter the 1099-NEC as Miscellaneous Income/Other Taxable Income, she will not be subject to Self-Employment taxes, but she still must pay income tax on it.
Review your entries to ensure that income is not counted twice. You can also preview the tax return to check what is there by following the instructions below:
- Select Tax Tools on the left of your screen
- Click Tools from the drop-down menu
- Click on View Tax Summary
- Click on Preview my 1040 on the left-hand side of screen.
For additional information please refer to the TurboTax article Self-Employed Federal Income Taxes.
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