I have self employment income of around $17,000. I have mileage, and cellphone deductions that equal more than my income. I also have 3 dependents. Federal refund $0??

[cheyenne112198]

Is this correct?

[DoninGA]

No refund would be correct. 

Since your self-employment has a Net Loss then you have no earned income to report on your tax return, assuming the self-employment is your only income.

Without earned income you are not eligible for any tax credits based on earned income.

[Critter-3]

FYI ... you MUST report all legitimate expenses on the Sch C.  Leaving some or all of them off to qualify for a credit is against the law and comes with hefty penalties.  BUT since you did have gross income on the Sch C you still must file the return even if the bottom line is a zero. 

[cheyenne112198]

I do Instacart, Uber eat, Spark (Walmart deliveries) etc. last year I filed with Jackson Hewitt and got a large return but did have taxes taken out of my PUA payments and only did gig work for 3 months of the year. My mileage is a majority of my “expenses” (high mileage for decent pay in my area) and my cellphone is the only other expense I have that is able to be written off. I use one vehicle strictly for deliveries only.

[Critter-3]

Last year, 2021 the rules were very different and you could get  the credits even with no income and the EIC could even be based off 2019's earned income  ... but the rules for 2022 went back to pre 2021 rules. 

[Critter-3]

Also ... unless you have a verifyable office in your home that you can report on the Sch C (which you really cannot if your bottom line is a zero)   the mileage from your home to the first pick up event & from the last drop off point home are considered personal commuting miles so you may need to rethink your mileage figure.   

[cheyenne112198]

If I pay quarterly taxes this year on my self employed income will that help with actually getting a refund next year? 

[cheyenne112198]

So all mileage can’t be written off? Just from the store to the customers home? 

[xmasbaby0]

The rules for getting the child tax credit on a 2021 tax return and now on a 2022 return are very different.  For 2021 you could get $3600 for a child under 6 or $3000 for a child between 6 and 17 even if you had no income/did not work.   That is NOT the way it will work for your 2022 tax return.  The “old” rules are back.   The maximum amount of the child tax credit is now $2000; the refundable “additional child tax credit” amount is $1500.   In order to get that credit, you have to have income from working.  The credit is calculated based on the amount you earned above $2500 multiplied by 15%, up to the full $1500.  If your child is older than 16 at the end of 2022, you do not get the CTC.  But you may still get the non-refundable $500 credit for other dependents instead.

https://ttlc.intuit.com/questions/1900923-what-is-the-child-tax-credit

https://www.irs.gov/help/ita/does-my-childdependent-qualify-for-the-child-tax-credit-or-the-credit-f...

[Critter-3]

Paying in quarterly estimates just to get them back at the end of the year (without interest ) is not a good idea ...put the money into a savings account instead.

Here is some good reading for the self employed : 

Publication 463 Travel, Gift, and Car Expenses

Look at the chart on page 12:

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

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

[rjs]

Last year you got a big refund because you had tax withheld from your unemployment benefits. You didn't have to pay that much tax - maybe you didn't have to pay any tax at all - so you got back most or all of the tax that was withheld. This year you didn't have any tax withheld, so there is nothing to be refunded.

---

@cheyenne112198 wrote:

If I pay quarterly taxes this year on my self employed income will that help with actually getting a refund next year? 

---

Sure you can to that. But you're just handing over your own money to the government. They hold your money all year and send it back to you when you file your tax return at the end of the year. And they don't pay you any interest on it. If you do what Critter-3 suggested and put your money in a savings account instead of sending it to the government, at least you'll earn a small amount of interest on it.

[rjs]

---

@cheyenne112198 wrote:

So all mileage can’t be written off? Just from the store to the customers home? 

---

Basically that's true. Any trip to or from home is not deductible. But if you go from one customer to another, or from a customer back to the store and make another delivery without going home first, that's all deductible mileage.

[Mike9241]

@cheyenne112198  .there may be some good news. if you have a loss on this business and no other business or nonbusiness income, you would have a net operating loss. Turborax does not compute this.  Use Form 1045 Schedule A. the NOL can only be carried forward to reduce taxes for next year.

https://www.irs.gov/forms-pubs/about-form-1045 

as a side note.  if your business continues to produce losses year after year the IRS can challenge this and rule the activity is a hobby. then the revenue would be taxable (not subject to self-employment taxes) but most deductions and expenses for the activity would be disallowed. losses in an activity for 3 or more of the taxable years in the period of 5 consecutive taxable years which ends with the current taxable year could be deemed a hobby by the iRS, unless upon audit, the taxpayer can provide substantiation acceptable to the iRS that this activity was engaged in for profit