Help with 1099 Misc

[avilardo1]

my 18 year old high school student worked a part time job and was given a 1099 Misc with the earnings listed in box 7.  When trying to file her taxes, it is labeling her as "self employed"  and making her pay self employment taxes.  She also worked a second part time job and should have gotten the federal taxes returned to her.  However it is keeping that money and asking for additional money to cover the self employment taxes.  Is this correct?!?!?! HELP!

[Patrice]

Yes, this is correct. If your 1099-MISC has an amount in Box 7 (Nonemployee compensation), the payer did not consider you an employee. Instead, they are treating you as a self-employed worker, also called an independent contractor and she will be required to file a Schedule C on her tax return

The good thing about filing Schedule C is the ability to apply any expenses you incurred while performing those services. 

The only downside is that you’ll be subject to self-employment tax on your consulting earnings… which is basically the self-employed person’s equivalent of social security and Medicare tax that employers normally withhold from your paychecks. That tax is calculated on Schedule SE, and you’ll see an amount appear on Form 1040, line 58.

When you’re paid this way, there’s no withholding taken out of your income, which means you’ll pay both self-employment tax as well as income tax.

But being self-employed enables you to have lots of write-offs as well, so make sure to enter all your expenses. This helps you reduce the taxes you might owe or increase your refund. We’ll help you get every possible tax break you deserve.

[avilardo1]

With her being a full time high school student, will she still have to pay the self employment taxes? She was not self employed

[Patrice]

Yes, she will be responsible to pay the taxes.  If she, receives a 1099-MISc with income in box 7 then the IRS does consider her as "self-employed"

[avilardo1]

Is the self employment tax 15.3%?
Also, what is accepted for her to put on the schedule c?  Where would I find this information? I've never dealt with this before and obviously know nothing about it.

[Patrice]

Self-employment taxes consist of 
 12.4% for Social Security. For 2016, this part of the tax applies to the first $118,500 of earnings. If you earn more than that (from self-employment or, if you also have a job, from the combination of your job and your business), then the 12.4 percent part of the tax that pays for Social Security stops for the year.
AND
2.9% for Medicare. The Medicare portion of the self-employment tax doesn’t stop. No matter how much you earn, you'll pay the 2.9 percent Medicare tax.