How much money can you make in a private business before they HAVE to take out taxes?

Question

My boyfriend is an electrician, and is right now working under someone else, and they told him that after he earns $600.00 he would have to start paying taxes.. However others tell us that after $500.00 he would have to start paying taxes, does anybody know the real limit?

Answer 1

The LAW says you have to pay taxes on all income. However, if you have low income, such as only $600.00 per year, you won't owe any. They don't have to take out taxes out of his pay, he can be a subcontractor to this company, however, they will give him a 1099 form at tax time, and a copy of that goes to the IRS, so, if you don't declare it, it's tax evation. And the low limit of where you start paying depends on lots of things like deductions.

Answer 2

You have to pay tax on any money you make from working that is ordinary income. What they mean is that if an employer pays a person more than $600.00 they are required to issue him a 1099Misc at the end of the year reporting the income paid to the IRS. If your boyfriend is not having regular payroll taxes withheld out of his paycheck, he will be responsible to pay something called Self Employment Tax, which is the Social Security and Medicare that would normally be taken out of a regular paycheck. This is calculated after he takes any expenses he incurred in making the money. This all gets calculated on a Schedule C and Schedule SE which then flows to the 1040 form. Any profit or income is then included in your gross income in determining your federal income tax. Consult a tax pro at tax time. Keep good records of his expenses.

Answer 3

It varies from state to state you will need to look in the phone book under IRS or call your local Income tax rep.

Answer 4

any amount, as long as his entire income is above 3000, I would report it, even if it's 100 on the side.

Answer 5

just report it...better to be honest then end up in jail..justification of this will lead to justifying everything else that comes along and in the end you lose or go to jail...

Answer 6

$500.00