Hello I haven't work this year, my family has been supporting me, as a hobby freelancer I created some idea videos for pinterest for their reward program, my only income will be less than 400$ for the year and only income that I have, do I have to file taxes?
@Nezihe1 If you are talking about 2022 the year is not over yet. You may have more income W2, 1099NEC or cash or another reason to file a return. Here's some general info.
If you got Cash. You don't need to get a 1099NEC or 1099Misc or 1099K. Even if you did you can enter all your income as Cash. Only the total goes to schedule C.
You will need to keep good records. You may get a 1099NEC at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small and if you don't get the 1099NEC.
You use your own records. You are considered self employed and have to fill out a schedule C for business income. You use your own name, address and ssn or business name and EIN if you have one. You should say you use the Cash Accounting Method and all income is At Risk.
After it asks if you received any 1099Misc or 1099NEC it will ask if you had any income not reported on a 1099Misc. You should be keeping your own records. Just go through the interview and answer the questions. Then you will enter your expenses.
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.
The SE tax is already included in your tax due or reduced your refund. It is on the 1040 Schedule 2 line 4 which goes to 1040 line 23. The SE tax is in addition to your regular income tax on the net profit.
Here is some IRS reading material……
IRS information on Self Employment
Pulication 334, Tax Guide for Small Business
Publication 535 Business Expenses
If this is for 2022 income, you have missed the dates for making estimated payments. Those installments were due April 15, June 15, September 15, and January 15 (of this year). When you file your tax return for 2022, you will pay any tax due.
According to the Georgia Department of Revenue -
Estimated Tax Estimated tax is required for each individual subject to Georgia income tax who reasonably expects to have gross income during the year which exceeds (1) personal exemption, plus (2) credits for dependents, plus (3) estimated deductions, plus (4) $1,000 of income not subject to withholding.
Estimated tax required from persons not regarded as farmers or fishermen shall be filed on or before April 15 of the taxable year, except if the above requirements are first met on or after April 1 and before June 1, estimated tax must be filed by June 15; on or after June 1 but before September 1, by September 15; and on or after September 1, by January 15 of the following year. Individuals filing on a fiscal year basis ending after December 31 must file on corresponding dates.
You can find the filing requirements and exemption amounts here.
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@Nezihe1 - no, if your only income is less than $400, then there is no filing requirement......
"You have to file an income tax return if your net earnings from self-employment were $400 or more. "
The IRS considers anything on a form 1099-NEC to be self employment income. Technically, the filing requirement is $400. But, the way the math works out, there is no tax unless your self employment income is more than $432.
Aside from the filing requirement for self-employment income, you must file a tax return if you received advance Premium Tax Credit for health insurance from the Marketplace ("Obamacare"), or if you received Advance Child Tax Credit payments. You might also want to file, even though you are not required to, if you qualify for the Recovery Rebate Credit and you did not receive a stimulus payment (Economic Impact Payment) for the full amount of the credit that you qualify for.
Thank you so much for answering, I m assuming that for earning under 400$ company shouldn't send me 1099-nec, but if they do, even if I don't owe any taxes for the amount I made, am I obligated to file than?
Yes for 2022 and no medical insurance from marketplace, thank you for your help, I just don't want to have any problems later with IRS over a small amount made and not filing, thank you for clearing it for me
One last question... Let's say I made more than 400$ and I have to file, but company I did the work for didn't send me the 1099-nec and I can't get one even after I tried to contact them, how can I file the amount I earned on the tax software easiest way?
In TurboTax you enter the income as business income (self-employment income) that was not reported on a 1099-NEC. You do not have to enter any information about the company that paid you. You just enter the amount that you received.
You cannot report it as "other income." "Other income" is reported on Schedule 1 and is not subject to self-employment tax. Self-employment income is reported on Schedule C. If your self-employment income is more than $432 you will have to pay self-employment tax, even if your income is low enough that you do not have to pay any income tax. Income tax and self-employment tax are two separate taxes, but both are included on your tax return.
my family has been supporting me,
Most likely you are then someone's dependent, and thus would not qualify for a number of Federal tax credits.
State may be different.
@rjs The OP never asked about credits, so why bring it up? Doesn't that risk confusing the OP? if it were bringing up things that the OP might be eligible for, then I understand that, but surfacing issues that the OP is not even eligible for, doesn't that risk the confusion?
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