Help with 1099 Misc

Forum|Forum|7 years ago
June 6, 2019
1 reply
5 views

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!

TurboTax Deluxe Online

Anonymous

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.