1098-t Refund

2 replies
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My son earned only $3,100 and owes $197.00 in additional taxes, however, he has over $16,000 in Deductions, including the $4,000 Tuition credit, but this does not reduce his taxes owed, why?

KarenM90

Level 11

It depends. Was the $3100 your son earned self-employment income, paid on a 1099-Misc or similar income for which he didn't receive a W2?

If so, even though he had other deductions, he will still owe the self-employment tax.

Self-employment tax is the "equivalent" of social security tax that is withheld from a W2 employee's payroll. You owe those amounts regardless of how much (or how little) you make.

Here is a Help Article that will explain more details: Self Employment Tax. Why am I paying it?

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NCperson

Level 15

can you be more specific on how your son earned the $3100? was that on a W-2? was that dividends? was that on a 1099C. Where they lottery winnings (it happens!) What was the job?

What are the $16,000 of deductions? what categories? that sounds quite unusual.

and what do you mean the $4000 tuition credit? are you talking about AOTC? if he is your dependent, he is not eligible for AOTC.

is he your dependent?