Confirming: Does a full time dependent student (under 24) have to pay taxes with $2748 1099-MISC income? He had medicaid in 2016.

[lazobiz]

(TurboTax implies he does have to file and pay taxes, but we always thought he didn't have to if his income is that low and if he is a full-time dependent student.) 

[Cattlerancher · Accepted solution]

Agreed it is a lot of tax, but it has nothing to do with Obamacare. I did a workup of his situation in my own TT H&B and was taxed $151 federal and $388 SE tax, $539 total. Because he is claimed on someone else's tax return he only gets a standard deduction of $1050. Is that about what you get? Did he incur any expenses to earn this income? 10% on federal, 15.3% on SE tax. Sorry~~~~~

[lazobiz]

Yes -- that's about what we came up with too.  It's just soooo much $$...  wanted to make sure we weren't doing anything wrong.  Thank-you for your time and assistance.  It helps to have confirmation.

[Cattlerancher]

With a 1099-MISC (if income is reported in box 7) he is a self employed sole proprietor which means he is subject to self employment tax on earnings over about $400. So yes, he will owe SE tax and must file a tax return but will probably not owe any federal income tax.

[lazobiz]

Thanks, Cattlerancher.  Our tax computations show that he STILL will owe federal income tax (in addition to SE tax).  Do you think that's correct?  I'm thinking yes because he was on medicaid (Obamacare)?  It just seems like a lot of tax for a dependent college kid with little income to be paying...