Why is TurboTax telling me I owe $613 federal tax on less than $7000 income?

Forum|Forum|6 years ago
March 18, 2020
2 replies
4 views

My son is using Turbo Tax Free Edition.

He entered $1,400 for a college job reported on a W2 and $5,500 reported as "other income" on a 1099-MISC.

It is calculating that he owes $613 in federal taxes.

It calculates a standard deduction of less than $2,000 which I don't get - the standard deduction for single under 65 is $12,200.

Any idea what he/we are doing wrong?!

...Bigger question is...do we even need to do this?! No tax was withheld so he's not going to get a refund. Since he's under the $12,200 threshold he doesn't actually need to file, right?

TurboTax Free Edition Online

Best answer by rjs

Since your son is in college I assume that you can claim him as a dependent. (It doesn't matter whether you actually do claim him. The question is whether you can claim him.) The filing requirements are different for someone who can be claimed as a dependent, and he does not necessarily get the same standard deduction as someone who cannot be claimed as a dependent.

@paulharv66 wrote:

Since he's under the $12,200 threshold he doesn't actually need to file, right?

Not right. The $5,500 of "other income" on the 1099-MISC is unearned income. Someone who can be claimed as a dependent is required to file if his unearned income is more than $1,100. So your son does have to file.

@paulharv66 wrote:

It calculates a standard deduction of less than $2,000 which I don't get - the standard deduction for single under 65 is $12,200.

If you can claim your son as a dependent, his standard deduction is limited to his earned income plus $350. Only the $1,400 on the W-2 is earned income, so his standard deduction is $1,400 + $350 = $1,750.

rjs

Answer

Level 15

Since your son is in college I assume that you can claim him as a dependent. (It doesn't matter whether you actually do claim him. The question is whether you can claim him.) The filing requirements are different for someone who can be claimed as a dependent, and he does not necessarily get the same standard deduction as someone who cannot be claimed as a dependent.

@paulharv66 wrote:

Since he's under the $12,200 threshold he doesn't actually need to file, right?

Not right. The $5,500 of "other income" on the 1099-MISC is unearned income. Someone who can be claimed as a dependent is required to file if his unearned income is more than $1,100. So your son does have to file.

@paulharv66 wrote:

It calculates a standard deduction of less than $2,000 which I don't get - the standard deduction for single under 65 is $12,200.

If you can claim your son as a dependent, his standard deduction is limited to his earned income plus $350. Only the $1,400 on the W-2 is earned income, so his standard deduction is $1,400 + $350 = $1,750.

P

paulharv66Author

Level 2

Ah, I see now. Thanks. That's not good news but it's accurate and well explained! Thank you so much.

E

ebsmith

Level 2

Can I get some help with a similar situation, please.

We claim my daughter as a dependent, she is a college student.

I do her taxes separately.

She received a W2 for 5K with $437 withheld in federal taxes.

She received a 1099 for $1499 from a fellowship.

If I enter the 1099 amount, her refund is reduced to only ~$200,

If I don't enter the 1099 she gets the whole $437 refund.

Since she made less than 7K shouldn't she get the whole refund?

Any help is appreciated...............

VolvoGirl

Level 15

She probably owes the separate self employment tax on the 1099Misc. Or it needs to be entered a different way. I don't know how fellowships are taxed.

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 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. So you get social security credit for it when you retire.