How should a minor go about with taxes?

Question

I am 15 years old and have $6,000 that I have earned for working through a website. Once I submit a W-9 form, I will be recieving the $6,000 in one check. The website will not be taking out taxes, social security, etc. How do I go about taxes, and what will happen if I deposit the check and just don't do the taxes? I am completely new to taxes and tax returns and all that so please answer in simple terms!

Answer 1

W-9 is a request for a taxpayer ID number. If you have a social security number, you don't have to use a W-9. Whoever is paying you will issue you a W-2 or a 1099 to report your earnings. You can be paid whenever you want, and you'll get the earnings report at the end of the year.

Important: make sure that you have all of their information before you give them your own personal information. This is extremely important! If they're not willing to give you simple things like business name, business ID number, address, phone number, they're a FRAUD. Don't give them anything (and you'll likely have to kiss your $6000 goodbye). Hopefully, your parents are involved in this with you. Adults can be absolute worms sometimes, and it takes a ruthless parent to help you root out the dopes trying to scam you. I always tell people to make phone calls or visit in person to make sure the business is legitimate. You can also check with the Secretary of State or Department of Licensing when you get the business ID number and name.

When you get paid, you will be responsible to pay your own income taxes and self-employment taxes, so be sure you put aside some money for this.

If you'd like, I can walk you through this. E-mail me with questions each step of the way, and I can also give you some clues about paying the least possible in income taxes, if you meet the requirements.

Answer 2

You will file a form 1040 along with a schedule C (or probably C-EZ) and a schedule SE. You'll show your income and any associated allowable expenses on the schedule C, then use the number from the bottom of that schedule on your schedule SE to calculate self-employment tax, then take the numbers from the bottom of both of the schedules onto your form 1040 to calculate your total tax.

I hope you didn't spend all of the money. You'll owe around $900 in federal taxes all together - most of that is for self-employment tax.

Depending on where you live, you might also have to file a state and/or local tax return, and pay something there.

If you just ignore it and don't file, eventually you'll get a letter from the IRS and from your state telling you how much you owe - by that time there will be interest and penalties, and you could owe a lot more than if you just take care of it now.

Answer 3

I agree with Mahal's suspicion about fraud. Don't give them any money (for a "processing fee", etc), don't give them your bank account number (so they can "deposit the money in your account"), and don't give them your Social Security number until you have checked them out with government authorities and the Better Business Bureau.