Im 16, self employed, will be making about 8k by the end of the year,
i am a dependant of my parents,
Will i have to file taxes? Will i have to pay anything, i thought that if you make less than 8k in one year they dont tax you. What am i gonna have to pay? If they do tax me will they tax me as if i were in my parents tax bracket?
2007-10-24 11:00:55 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Yes, you'll have to file and pay tax. People who are not dependents don't pay federal income tax on the first $8750 of wages as an employee for 2007, but since you are a dependent, the amount you make over $5350 will be taxed. And since you are self-employed, you owe self-employment tax if you make $400 or more - that's for social security and medicare - if you were an employee, half of it would have been deducted from your pay and your employer would be responsible for paying the other half.
If you make around $8000, the $2650 or so that's above the limit will be taxed at 10% for federal income tax, so that would be around $265. In addition you'll pay self-employment tax (for social security and medicare) of a little over $1100. And if you haven't made quarterly payments, you'll owe an additional penalty for underwithholding. So figure on around $1400 in taxes. If you live in a place that has state and/or local income tax, that will be additional.
Your parents' tax bracket won't have anything to do with that, since this is your EARNED income - under certain circumstances, a minor's INVESTMENT income gets taxed at the parents' rate.
2007-10-24 15:15:33 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
Q. Will i have to file taxes?
A. Yes
Q. Will i have to pay anything
A. Yes
Q. i thought that if you make less than 8k in one year they dont tax you
A. That does not apply if you are self-employed or if you are someone else's dependent. You are both.
Q. What am i gonna have to pay?
A. Self-employment tax of 15.3% of 92.35% of self-employment income. Income tax of (probably) 10-15% of the amount by which your total taxable income exceeds the total of your deductions.
Q. If they do tax me will they tax me as if i were in my parents tax bracket?
A. Not on this income. Maybe on your investment income.
2007-10-24 14:18:12 · answer #2 · answered by StephenWeinstein 7 · 0⤊ 0⤋
You will have to file a separate tax return. Depending on your total income, you may receive a partial or total refund of any tax withheld.
"Self-employed" as a 16 year old?
2007-10-24 11:09:28 · answer #3 · answered by npk 7 · 0⤊ 0⤋