<p>Hello gurus!</p>
<p>I have searched the internet with no conclusive answers, so I figure I will post my college kid tax question here. I hope that you can help.</p>
<p>S worked in a warehouse this summer and had no taxes taken out of each pay check. We knew he had to pay social security taxes, but planned on paying them at tax time, when he got his income tax forms. </p>
<p>He received a 1099 Misc Income with $2312 in nonemployer compensation.</p>
<p>My searches have led me to having him file a multitude of forms from Net Profit from Business (really? he is just a kid, with no business!), to a Self Employment Tax form. The Self Employment Tax form made sense, but required information from other forms...so confusing! Does anyone have any suggestions on how to pay his social security taxes easily? His income doesn't support filing a tax return form, but I can't figure out how to side-step it.</p>
<p>Thank you in advance!</p>
<p>He is self employed. He needs to file some version of the C and the SE. Check the website for your bank or credit union and see if there is a link to a free on-line version of TurboTax. It will “talk” you through all of the forms that you need.</p>
<p>It’s really not so hard - he can probably do a Schedule C-EZ (he probably has little, if anything in the way of “business expenses”), plus will need to do Schedule SE - they’re both very simple. Shouldn’t even require any tax software - just look at the instructions for the forms (and the forms themselves) on the IRS website. He’ll need to do the 1040 (not 1040A or 1040EZ). 3 pieces of paper.</p>
<p>My kid’s employer also (illegally, of course) calls her an “independent contractor”, so I did these forms for her last year. Easy-peazy. </p>
<p>( Here’s what you do - from memory - check the instructions for details and to verify:
put the $2312 on the schedule C-EZ. Subtract out any expenses, such as if he had to pay for a uniform or any safety equipment or other tools/equipment. This amount (the “net profit from business” or somesuch) goes on the schedule SE (and also goes on the front side of the 1040), gets multiplied by.9235, then that amount gets multiplied by .153. This is the “self-employment tax”. You divide that amount by 2, and put that number on the 1040 line for “1/2 of self-employment tax” - that amount then gets subtracted from from the "net profit from business number on the 1040 to yield the adjusted gross income.
If $2312 is the total of what he was paid in 2010, he won’t owe any income tax, just the self-employment tax.)</p>
<p>Unlike a W2, the 1099 does not get sent in with the tax return.
You can still claim him as a dependent, assuming that you pay more than 1/2 of his support, he was under 24 at the end of 2010, and a full-time student.</p>