Im 21, parents still claim me, they help me pay for college.
But this summer I went and worked on a fishing boat. My taxes are going to be on a form 1099, is there anyway to soften the blow on how much I am going to have to pay? Since my parents claim me I can't claim the $1000 I will spend on text books this year. Is there anything else I may be missing?
?
keep good records of any business related expenses. You're being paid as a self employed contractor so you can deduct valid business expenses, you'll pay tax only on the net profit.
Not much more you can do. You're still a dependent so Mom & Dad get your exemption and all applicable education credits.
File form 1040-ES every quarter and make estimated tax payments so the blow isn't so bad in April. You could be penalized if you owe more than $1000 when you file your return.
I recommend that you set aside about 25% to 35% of your income toward taxes.
tro
you will be filing this income on Sch C and you will pay self employment tax on it, Sch SE
the education costs you incur will have no bearing on how much tax you will pay
Cathi K
You are taxed on profit not revenue.
Casey Y
Railed on taxes, you mean paying your taxes like everyone else???
$1,000 huh? Are you forgetting to report those cash tips :)
Bobbie
Just make some advance estimated tax payments for that purpose and time.
And you should be making your quarterly estimated taxes during each tax year for each quarter that you do have a NET PROFIT on your Schedule C and your SE of your 1040 FIT return during the tax year.
Form 1040-ES, Estimated Tax for Individuals
Use this package to figure and pay your estimated tax.
Estimated tax is the method used to pay tax on income that is not subject to withholding (for example, earnings from self-employment,
http://www.irs.gov/uac/Form-1040-ES,-Estimated-Tax-for-Individuals-1
http://www.irs.gov/pub/irs-pdf/f1040es.pdf
Payment Due Dates
You can pay all of your estimated tax by April 15, 2014, or
in four equal amounts by the dates shown below.
1st payment . . . . . . . . . . . . . . . . . April 15, 2014
2nd payment . . . . . . . . . . . . . . . . June 16, 2014
3rd payment . . . . . . . . . . . . . . . . . Sept. 15, 2014
4th payment . . . . . . . . . . . . . . . . . Jan. 15, 2015*
Pay by Check or Money Order Using the
Estimated Tax Payment Voucher
Self employed independent contractor using your daily written receipt book records to report your gross income on the schedule C or CEZ along with the SE to determine your NET PROFIT or LOSS from your business income during the tax year for this purpose.
SE your social security medicare tax amounts that you would OWE on your NET profit amount that would end up the page 1 line 12 from the schedule C and any SE tax owed page 2 line 56 and page 1 line 27 Deductible part of self employment tax attach schedule SE line 27 $$$ amount.
Starting, Operating, or Closing a Business
Starting a Business
Starting a business could be exciting. If you're considering starting a business, start here. This section provides information on everything from a checklist for a new business, to selecting a business structure, and more.
www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Starting-a-Business
www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Starting,-Operating,-or-Closing-a-Business
Hope that you find the above enclosed information useful. 09/05/2014