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January 6, 2025
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Can an independent contractor file taxes on dependents and receive a return amount. Or is this only for W2 employees?

  • January 6, 2025
  • 3 replies
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If I am doing DoorDash, or real estate agent or rover. Can I file dependents and receive a return amount for them? I have three kids. If I can do this will I need to make a certain amount? I heard if you make over 600 as independent contractor you have to pay money back to IRS. Is that true?
    Best answer by xmasbaby0

    You can claim dependents on your tax return whether you have W-2 income or self-employment income.   The amount of any child-related refundable credits will still be based on how MUCH you earned from working, whether that was at a W-2 job or  independent contracting.

     

    If you made at least $400 for self-employment you are required to file a tax return and pay self-employment tax for Social Security and Medicare.   All of your income---from all the various sources---goes on the same tax return, along with the information for your dependents.

     

     

    If you have self-employment income for which you will pay self-employment tax for Social Security and Medicare,  you will need to use online Premium software or any version of the desktop software download so that you can prepare a Schedule C for your business expenses.

     

     

    https://ttlc.intuit.com/questions/2926899-how-does-my-side-job-affect-my-taxes

     

     

    https://ttlc.intuit.com/turbotax-support/en-us/help-article/form-1099-nec/1099-nec/L5qTsBiSe_US_en_US

     

    https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/26653

     

    https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

     

    https://ttlc.intuit.com/questions/2902389-why-am-i-paying-self-employment-tax

    https://ttlc.intuit.com/questions/1901340-where-do-i-enter-schedule-c

     

     

    https://ttlc.intuit.com/questions/3398950-what-self-employed-expenses-can-i-deduct

     

     

    https://blog.turbotax.intuit.com/self-employed/self-employed-tax-deductions-

    calculator-2021-2022-50907/

     

    https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs

     

     

    If you live in a state with a state income tax, you might need to make estimated payments to your state.

     

     

    https://turbotax.intuit.com/tax-tools/calculators/self-employed/

     

    https://ttlc.intuit.com/community/business-taxes/discussion/self-employed-don-t-miss-these-tax-moves/00/3400413

     

     

     

     

    Have you entered income from working in 2024?  If not,  you will not receive an income tax refund based on having dependent children.

     

      The maximum amount of the child tax credit is now $2000 per child; the refundable “additional child tax credit” amount is $1700.   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 $1700 per child. If the amount you earned was too low, you will not get the full $1700.

     

     If your child is older than 16 at the end of 2024, 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://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/additional-child-tax-credit/L6xFeMFEf_US_en_US?uid=lqnuygah

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

     

     

    And for the Earned Income Credit—-

     

    https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-eic-or-eitc

    https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

     

     

     

     

    Look at your 2024 Form 1040 to see the child-related credits you received

     

    PREVIEW 1040

    https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

     

    Child Tax Credit line 19

    Credit for Other Dependents line 19

    Earned Income Credit line 27

    Additional Child Tax Credit line 28

     

    3 replies

    xmasbaby0Answer
    Employee
    January 6, 2025

    You can claim dependents on your tax return whether you have W-2 income or self-employment income.   The amount of any child-related refundable credits will still be based on how MUCH you earned from working, whether that was at a W-2 job or  independent contracting.

     

    If you made at least $400 for self-employment you are required to file a tax return and pay self-employment tax for Social Security and Medicare.   All of your income---from all the various sources---goes on the same tax return, along with the information for your dependents.

     

     

    If you have self-employment income for which you will pay self-employment tax for Social Security and Medicare,  you will need to use online Premium software or any version of the desktop software download so that you can prepare a Schedule C for your business expenses.

     

     

    https://ttlc.intuit.com/questions/2926899-how-does-my-side-job-affect-my-taxes

     

     

    https://ttlc.intuit.com/turbotax-support/en-us/help-article/form-1099-nec/1099-nec/L5qTsBiSe_US_en_US

     

    https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/26653

     

    https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

     

    https://ttlc.intuit.com/questions/2902389-why-am-i-paying-self-employment-tax

    https://ttlc.intuit.com/questions/1901340-where-do-i-enter-schedule-c

     

     

    https://ttlc.intuit.com/questions/3398950-what-self-employed-expenses-can-i-deduct

     

     

    https://blog.turbotax.intuit.com/self-employed/self-employed-tax-deductions-

    calculator-2021-2022-50907/

     

    https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs

     

     

    If you live in a state with a state income tax, you might need to make estimated payments to your state.

     

     

    https://turbotax.intuit.com/tax-tools/calculators/self-employed/

     

    https://ttlc.intuit.com/community/business-taxes/discussion/self-employed-don-t-miss-these-tax-moves/00/3400413

     

     

     

     

    Have you entered income from working in 2024?  If not,  you will not receive an income tax refund based on having dependent children.

     

      The maximum amount of the child tax credit is now $2000 per child; the refundable “additional child tax credit” amount is $1700.   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 $1700 per child. If the amount you earned was too low, you will not get the full $1700.

     

     If your child is older than 16 at the end of 2024, 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://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/additional-child-tax-credit/L6xFeMFEf_US_en_US?uid=lqnuygah

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

     

     

    And for the Earned Income Credit—-

     

    https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-eic-or-eitc

    https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

     

     

     

     

    Look at your 2024 Form 1040 to see the child-related credits you received

     

    PREVIEW 1040

    https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

     

    Child Tax Credit line 19

    Credit for Other Dependents line 19

    Earned Income Credit line 27

    Additional Child Tax Credit line 28

     

    **Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
    DoninGA
    Employee
    January 6, 2025

    As an independent contractor you will enter your self-employment income and expenses on Schedule C.  The Schedule C is included with and part of your personal federal tax return, Form 1040.  The type of income you receive is not relevant when claiming dependents on a tax return.

     

    You are required to report all self-employment income received if $400 or more.  On your Net self-employment income you will owe Self-Employment taxes.  SE taxes are 15.3% of your net SE income.

    Employee
    January 6, 2025

    If your income is too low to receive the full $2000 child tax credit, you can qualify for the "additional child tax credit" which is based on earned income, that is income earned from working.  (Non-working income, like a pension, unemployment, or investments, do not count for this credit.)

     

    Self-employment IS earned income for the additional child tax credit.

     

    But more importantly, if you work a side job, you must file a tax return and report the income, even if you don't get tax paperwork, regardless of whether or not you  qualify for a credit.  You must report all your income, and then you get whatever credits you qualify for.