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

15 cents.

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

There is no "limit" or minimum before taxation of wages. If the employee is entitled to all his wages, the IRS will refund him;
no one else is allowed to make that determination.

Even if he is under 18, the employer must take out taxes from the beginning - your boyfriend's tax bracket is probably at the 15% rate. At the end of the year, your boyfriend will file a 1040 and will then know if he gets any money back.

The employer is NOT supposed to wait until a certain level of wages are earned before taxing that income - that's illegal and could get both boyfriend and employer in a lot of trouble.

If that's happening, your boyfriend could get hit with penalties and interest on taxes not paid - and the employer will get fined big time.

Answer 4

4

Answer 5

I am a tax professional. He responsible for his federal & state tax- on all net income, and for s.s. and medicare on net profit over &400. The employer will take out none of this. He needs to make quarterly payments to avoid any underpayment penalties.
P.S. Have him keep track on any expenses he may have for this job, it will help.

Answer 6

Your best bet would be to talk to a tax professional. If he is supposed to pay taxes on it, and someone on here gives you a wrong answer, it isn't that person's fault. It would be on your boyfriend. Better be safe than sorry. :(

Answer 7

Actually it is $600 yearly but technically you don't have to pay at all. Ever notice the little "Exempt" box at the top of the W4? Do some research on what the IRS REALLY is. They are a fraud. No one has to pay at all.

Answer 8

$600

Look at this link (you need to have Adobe Acrobat reader):
http://www.irs.gov/pub/irs-pdf/i1099msc_05.pdf

Look on page 1, right-hand column under "Specific Instructions" and it says $600.

Note, I am not a tax professional. You'll want to consult your tax professional for the final word on your specific situation.

Answer 9

i dont know about private business but in NY you can make up to $3000 with out paying taxes

Answer 10

600.00 or more and a 1099 must be filed, so taxes will need to be collected.

Answer 11

2 many