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ENT16
New Member

16 year old wanting to know how to file a 1099.

So I was planning on becoming a freelancing copywriter. However, I don't know how I would go about filing taxes. Here are some of the questions I hope to get responded to:

 

1.  What is the minimum income in $USD for me to file taxes (as a 16 year old)?

2. Would the taxes be under my mothers name (my guardian) or mine?

3. Do I have to file "X" amount of 1099 forms for each client/job or can I just file one 1099 in a quarter including all of my gross income?

4. Does the client I'm working for send me a form or do I manually have to get that myself?

5. Would "under the table" pay like paypal or venmo be liable on my 1099?

6.  Does me claiming myself as "self-employed" or having a "small-business" affect my mother's taxes or chances of me getting a student loan in the future for college?

7. Would I need to fill out the quarterly forms or the quarterly forms + the annual one?

 

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4 Replies

16 year old wanting to know how to file a 1099.

1.  What is the minimum income in $USD for me to file taxes (as a 16 year old)?  $400 of self employed income- it's the same regardless of your age. 

2. Would the taxes be under my mothers name (my guardian) or mine? yours - you would file using your social security number. Nothing you earn goes on your mother's tax return - it is simply how it works. 

3. Do I have to file "X" amount of 1099 forms for each client/job or can I just file one 1099 in a quarter including all of my gross income? your client should be giving you a 1099-NEC; if they don't you still have to report the income

4. Does the client I'm working for send me a form or do I manually have to get that myself? see #3

5. Would "under the table" pay like paypal or venmo be liable on my 1099? yes - there is no such thing as "under the table" - you are required to report all income earned - even if it is cash payments

6.  Does me claiming myself as "self-employed" or having a "small-business" affect my mother's taxes or chances of me getting a student loan in the future for college?  won't affect your mother's taxes, but FAFSA is going to ask about her income AND YOUR INCOME, so your income is part of the scholarship process.  Hard to say whether it affects your changes of getting a student loan - are you going to earn $1000 each year or $100,000 each year? 

7. Would I need to fill out the quarterly forms or the quarterly forms + the annual one?  the tax return and the 1099-NECs you receive are completed annually.  However, if you make enough money, then you might have to pay quarterly taxes, but that is just considered an estimated payment against what the annual form says determines you actually owe. 

 

good luck being an entrepreneur at such a young age!

Hal_Al
Level 15

16 year old wanting to know how to file a 1099.

Q.  Do I have to file "X" amount of 1099 forms for each client/job or can I just file one 1099 in a quarter including all of my gross income?

A.  You file one 1040-ES (not a 1099) each quarter to pay estimated taxes, on all your income for that quarter.

 

There is no underpayment penalty, at tax filing time if you owe less than  $1,000 in tax.

16 year old wanting to know how to file a 1099.

If you are new to being self employed, are not incorporated or in a partnership  and  are acting as your own bookkeeper and tax preparer you need to get educated ....  

If you have net self employment income of $400 or more you have to file a schedule C in your personal 1040 return for self employment business income. You may get a 1099-NEC for some of your income but you need to report all your income.  So you need to keep your own good records. Here is some reading material……

IRS information on Self Employment….
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center 

Publication 334, Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf 



Publication 535 Business Expenses
http://www.irs.gov/pub/irs-pdf/p535.pdf 

 

Home Office Expenses … Business Use of the Home

https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

https://www.irs.gov/pub/irs-pdf/p587.pdf

 

Publication 463 Travel, Gift, and Car Expenses

https://www.irs.gov/pub/irs-pdf/p463.pdf 

 

 

Publication 946 … Depreciation

https://www.irs.gov/pub/irs-pdf/p946.pdf

          

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Self Employed return and will help you keep up in your bookkeeping all year along with calculating the estimated payments needed ....
http://quickbooks.intuit.com/self-employed

          
Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C.  You pay 15.3% for 2017 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.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.
 


PAYING ESTIMATES
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% for 2017  SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

You must make quarterly estimated tax payments for the current tax year (or next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits. 
 
- 2. You expect your withholding and credits to be less than the smaller of: 
    90% of the tax to be shown on your current year’s tax return, or 
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

To prepare estimates for next year, You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

TomD8
Level 15

16 year old wanting to know how to file a 1099.

Just to clarify things a bit:

 

1.  A 1099 is a form that is issued to you at year's end by anyone who has paid you $600 or more that year for services you've provided to them in the course of their trade or business.  These forms are sent to you at year's end.  It is not a form that you issue unless you have paid someone else more than $600 in a year for their services.  It is your client's obligation to send the 1099 to you.  But you must keep track of all your income because you must report it all, whether you've received a 1099 or not.

 

2.  The income you earn as a free-lancer is considered self-employed income, and is reported by you on Schedule C, which is part of your federal tax return. You must file a tax return in your own name if your total net self-employed income for the year is $400 or more.  Your net income is your gross income for the year minus any expenses you have related to your free-lance services.  It follows that you should keep a record of any expenses you incur related to your work.

 

3.  If you were an employee (as opposed to a free-lance worker), your employer would issue you a W-2 at year's end, reporting your income for the year.  The W-2 would show the federal taxes your employer has withheld and paid for you during the year.  As a free-lancer (also known as an independent contractor) you do not receive a W-2, and your clients do not withhold taxes for you.  Since the IRS is a pay-as-you-go operation, a free-lancer is expected to make quarterly payments to the IRS of his "estimated" taxes.  This IRS reference explains more about that:

https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

 

4.  The only annual form you have to fill out is your tax return itself.

 

None of this is as complicated as it sounds.  You're probably a smart kid, and I think you'll get the hang of it all pretty quickly.  Good luck.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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