Can I use Turbotax if I don't have a work permit in US?

[lokki007]

I live in US and I was doing some photography as a hobby and sold my pictures on a couple of website. It wasn't much, around $1k.
Got 2 questions:
1. Is it possible to use Turbotax if I am not allowed to work in United States? Technically I wasn't "working", more of "self-employed". I don't want to not reporting it and have a problems later with IRS but I do not know if this will be asked by Turbotax after I start filing my paperwork.
2. Can I expense almost most of what I earned? I spent much more money on the equipment I am using, and I want to mention it in my expenses. If I can do that, do I need "Deluxe" version or "Self-Employed" version of the app to take advantage of this?
Thank you!

[Carl]

As a non-resident alien who does not qualify for an SSN or ITIN, you flat out can't use TurboTax. The program does not have the non-resident forms included, which is what you need. But you can check out an alternate website at <a rel="nofollow" target="_blank" href="http://www.sprintax.com">http://www.sprintax.com</a>.

[lokki007]

Thanks for the comment. I guess I needed to clarify a couple of things in an original post. My spouse will be filling out all W-2 she's making, I just wanted to include my income as well. I do have SSN, it's just my immigration status does not permit working in the US. We have been filling out taxes for last 5 years without any problems, just not through TurboTax. Will it be still the same answer to my question?

[Opus 17]

The IRS wants their money and does not report you to ICE.  You should report your income normally.  If you are a US resident and your spouse is a resident or citizen then you will use Turbotax and can file as married filing jointly.

See the other comments for information about self-employment income and expenses.

[Opus 17]

Part 2.

If you are self-employed, you must keep accurate records of your income and expenses.  You report your gross income and deduct your expenses, and pay income tax plus self-employment tax on your net profit.  Expenses can be quite complicated, and often assets like cameras and other equipment must be depreciated rather than expensed.  Turbotax Self-Employed version will guide you through everything.  There are also a number of links to IRS sites about SE taxes and expenses that I will try to get someone to post for you.

[Opus 17]

@VolvoGirl SE links?

[VolvoGirl]

This?  Or more?

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 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 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.

Here is some IRS reading material……

IRS information on Self Employment
<a rel="nofollow" target="_blank" href="http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center"...>

Pulication 334, Tax Guide for Small Business
<a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/p334.pdf">http://www.irs.gov/pub/irs-pdf/p334.pdf</a>

Publication 535 Business Expenses
<a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/p535.pdf">http://www.irs.gov/pub/irs-pdf/p535.pdf</a>

[Opus 17]

If it's really a hobby and you were not "engaged in a trade or business" then you can report the income as hobby income instead of self employment.  Your ability to deduct expenses is severely reduced, but you won't be subject to the extra 15% self employment tax.  
<a rel="nofollow" target="_blank" href="https://www.irs.gov/newsroom/business-or-hobby-answer-has-implications-for-deductions">https://www.i...>

[Opus 17]

You are a US resident for tax purposes if you pass the substantial presence test, whether or not you are legally allowed to work. https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

If you pass the substantial presence test and are a US resident, you are required to file a US tax return for all your world-wide income.   (You can take a credit for taxes paid in other countries.)  You must report and pay taxes even if you are legally allowed to work (the IRS does not inform on you to ICE, they just want their share of the $$).

You can use Turbotax. You will need an ITIN (international tax ID number) if you don't have a social security number. You can't e-file.  Use a fake ITIN to complete the program (try 999-88-9999).  Then print your return, sign it, and attach a form W-7 ITIN application, and mail both to the address for the W-7.

https://www.irs.gov/uac/about-form-w7

[Opus 17]

If you do not pass the substantial presence test and are a non-resident then you still need to file a tax return, but only for US-source income, and you can't use Turbotax.

[lokki007]

Thank you so much!