Less then $10,300 income

Forum|Forum|2 years ago
March 3, 2024
2 replies
0 views

My son received a W2 and a 1099 NEC. Total income was less than $10,300. Why is he going to have to pay taxes? With the W2 no taxes for Federal. When i add the 1099-NEC it shows needing to pay??

DoninGA

Employee

The Form 10999-NEC indicates that he had income from self-employment. If he has a net profit from the self-employment he will owe Self-Employment taxes. Which are different than federal income taxes.

SE taxes are for both the Employer and Employee portion of Social Security taxes and Medicare taxes.

VolvoGirl

Employee

The 1099NEC is for self employment income and he has to fill out Schedule C for it. He can deduct his expenses for it and only pay tax on the Net Profit.

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.

SharonD007

Your son will report the income from his 1099-NEC income on ‌Schedule C of his tax return. The IRS considers self-employment income as a business, so the good news is that he'll be able to deduct common business expenses from that income. To enter the business and self-employment income, follow the steps below:

Open TurboTax
Select Wages & Income
Select Self-Employment Income and Expenses
TurboTax will guide you through the interview screens to help you enter the income.

Review the TurboTax articles Reporting Self-Employment Business Income and Deductions for more information on business deductions. For additional information, review What self-employed expenses can I deduct? and How do I report income from self-employment?

@SB263002

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"