1099-NEC and Minors/18 Yr old's

[millie782]

Hi - 1099-NEC question... an 18 yr old earned $6,202.50 while working at a non-profit as a 1099 EE. When they filed their 1099-NEC, they were told they owed about $800-900 in taxes. Does that sound legitimate?

We've also had a minor who was attempting to file their taxes but was told that they were set up incorrectly and refused to include that child's 1099-NEC in their tax filing. I want to make sure that the tax preparing was wrong, unless our "contractor" set-up was set up incorrectly. We converted to a new payroll system on 1/1/24.

Thanks!

[xmasbaby0]

Money reported on a 1099NEC is "non-employee compensation" and is subject to self-employment tax for Social Security and Medicare since no tax was withheld for SS or Medicare from your son's pay.   Even though he is below the threshold to owe ordinary income tax, he owes self-employment tax.

https://turbotax.intuit.com/tax-tools/calculators/self-employed/

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

https://ttlc.intuit.com/turbotax-support/en-us/help-article/import-export-data-files/enter-self-empl...

[VolvoGirl]

Yes a 1099NEC is for contractor self employment income.   They are not an employee.   They will file it on Schedule C in their personal tax return.  They will pay self employment tax on it in addition to any regular income tax on it.  The SE tax is 15.3% on 92.35% of the net profit on Schedule C.  So $6203 x .9235 = 5,728.47.  Then 5,728.47 x .153 = 876.46.

Don't know about the second minor trying to file.  Would need more info like what the error message is.   Being a minor doesn't matter to file taxes.