topic How to report that I hired independent contractor for my business in Business & farm

How to report that I hired independent contractor for my business

Jarrod010 — Mon, 09 Mar 2026 04:54:35 GMT

My wife is a realtor (first year / Sole Proprietor). We paid our 17 year old son as an independent contractor to perform tasks for the business, such as, performing social media marketing, advertising type things. Also, to prevent him from tax liability, we kept it under the standard deduction. Idea being that we can write off the corporate tax at no expense to my son, also he can have some type of verifiable income in case he seeks out a lender for credit after turning 18. How do I enter this into turbotax to reap the rewards?

Re: How to report that I hired independent contractor for my business

KrisD15 — Sat, 26 Feb 2022 03:00:49 GMT

To Clarify

What is the limit of income where a person does not have fie taxes on it?

If the payments to an independent contract is less than 600, the Payer is not required to file a 1099-NEC, but the Independent Contractor needs to file and pay Self-Employment tax on that income.

Re: How to report that I hired independent contractor for my business

VolvoGirl — Sat, 26 Feb 2022 03:06:17 GMT

There is no minimum amount to report self employment independent contractor income. He has to file a return. Did you pay him less than $600? You don't have to give him a 1099NEC for under $600 but he has to report it on schedule C no matter how small. He may not owe any tax on it.

On your wife's Schedule C it goes on line 11 for Contract Labor. Where to enter Contract Labor
https://ttlc.intuit.com/community/entering-importing/help/how-do-i-enter-contract-labor/01/27407

Re: How to report that I hired independent contractor for my business

Jarrod010 — Sat, 26 Feb 2022 05:19:31 GMT

My apologies for the misstatement, to clarify, my son will file a return but his income is less than the standard deduction so he shouldn't have any taxable income. We made this arrangement to reduce our own taxes without creating any tax liability for him, having the additional benefit of showing that he has verifiable income in the event he needs to apply for credit. Am I thinking too far out the box on this one?

Re: How to report that I hired independent contractor for my business

VolvoGirl — Sat, 26 Feb 2022 17:44:13 GMT

Sorry, he won't owe any regular income tax on it but will owe self employment tax on $400 or more. If you file Schedule C for yourself you probably know how it works. He files the same way on his Schedule C.

You pay Self Employment tax (Scheduled SE) on a Net Profit of $400 or more on Schedule C. You pay 15.3% SE tax on 92.35% of your Net Profit (If it is 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.