Less then $10,300 income

[SB263002]

My son received a W2 and a 1099 NEC.  Total income was less than $10,300.  Why is he going to have to pay taxes?  With the W2 no taxes for Federal.  When i add the 1099-NEC it shows needing to pay??

[DoninGA]

The Form 10999-NEC indicates that he had income from self-employment.  If he has a net profit from the self-employment he will owe Self-Employment taxes.  Which are different than federal income taxes.

SE taxes are for both the Employer and Employee portion of Social Security taxes and Medicare taxes.

[VolvoGirl]

The 1099NEC is for self employment income and he has to fill out Schedule C for it.  He can deduct his expenses for it and only pay tax on the Net Profit.  

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 (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.  

[SharonD007]

Your son will report the income from his 1099-NEC income on ‌Schedule C of his tax return. The IRS considers self-employment income as a business, so the good news is that he'll be able to deduct common business expenses from that income. To enter the business and self-employment income, follow the steps below:

1. Open TurboTax
2. Select Wages & Income
3. Select Self-Employment Income and Expenses
4. TurboTax will guide you through the interview screens to help you enter the income.

Review the TurboTax articles Reporting Self-Employment Business Income and Deductions for more information on business deductions.  For additional information, review What self-employed expenses can I deduct? and How do I report income from self-employment? 

@SB263002