1099-MISC

[ewhit]

I'm trying to do taxes for my daughter. She has a regular parttime job that she gets a W-2 for, and 2 freelance jobs that she gets 1099-MISC's for.  She has W-2 income of $6330 and 1099-MISC incomes combined of $3705.  When putting in W-2 info only, it shows she gets a $553 refund, but after inputting the 1099 info, it shows she OWES $12.  Is this possible?  The SS, Medicare, and Fed tax she paid on the W-2 totals $530.  It just sounds unbelievable she would owe MORE on the additional 1099 income of $3705 than she does for the W-2 income of $6330.  What am I missing?

[VolvoGirl]

She doesn't have any withholding taken out of the 1099Misc income.  She owes regular income taxes on the total W2+1099Misc income and also owes self employment tax on the 1099Misc.  At least the W2 withholding covered most of the extra tax.

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 (If it is 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.  

And having more income would change any EIC credit she was getting.  On the W2 she only gets back from the federal income tax withholding in box 2 not the ss & Medicare boxes 4&6.