Yes, you can file your self-employed Income (for dancing) and claim your child using Self Employed version.
And no- the IRS doesn't just take out from what you made, they calculate the tax due based on your taxable income and deductions/credits. Once you have completed all your income, deductions and credits, your final result will show your tax due or refund for your 2016 tax return.
When going through your dancing income, be sure to report any expenses you have incurred and paid for dancing. The net income (your dancing income minus your expenses) will be subject to self- employment income tax, but the amount is included in your Federal refund/tax bill.
More information on self-employment taxes:
Note: If you have a large tax bill this year, consider paying quarterly payments to the IRS for 2017... The above link explains estimated taxes.
Yes you have to report all your income. If you didn't get a W2 for it then you are self employed.
When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.
If you are self employed......
To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.
You might want to use Quicken or QuickBooks to keep tract of your income and expenses. There is one called QBSE QuickBooks Self Employed that works with Online Turbo Tax and will give you a free online tax return next year.
You need to report all your income even if you don't get a 1099Misc. 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 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. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 27 (goes to 1040 line 7). The SE tax is already included in your tax due or reduced your refund. It is on the 1040 Schedule 4 line 57 (goes to 1040 line 14). 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
Publication 334, Tax Guide for Small Business
Publication 535 Business Expenses
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