Since my standard deduction is greater than my income, why must I pay taxes ?

[ablum2]

My income from 1099-MISC was ~$7200. Standard deduction is $12000.

I'm being assessed  $900 !

How can that be ?

[Karca · Accepted solution]

Most likely it's because you owe "self-employment tax", since most likely the 1099-MISC is considered self-employment income.

Generally, if you are an employee your employer pays there share of Social Security and Medicare taxes on your wages and withhold your share of Social Security and Medicare taxes from your paycheck every pay period.  Therefore you wouldn't have to pay these when filing your tax return.

However, as a self-employed individual, you would have to pay both of those portions when filing your return.

The self-employment tax is about 15.3% of your net self-employment income (income minus expenses).  The standard deduction cannot reduce your net self-employment income for self-employment tax purposes.  It'll only reduce your net income for federal income tax purposes.