IRS? If I earn only $45 per week tutoring (I work for myself now) is that under the IRS earnings threshold?

Question

I live in Southern Cali (I have no car folks, lost my car in a car accident in 2003) and I had to start working somehow. So, I started tutoring to make a few dollars come in...less than $200 a month.

I was told from H&R Block that if a single person earsn less than 6K or 5K a year, then that person does not have to report those earnings to the IRS. What happens if you earn $180 a month-or 2K a year?

What about unemployment? What will they say? it's not like I'm rolling in the dough and I don't have my own transportation. Yes--I'm looking into car pooling, but-that is a different question.

If you want to criticize me-please do it some place else. I didn't come on this to get that.

Answer 1

Listen to v b. You were given bad advice.

Answer 2

H&R Block's answer was correct for a person working as an employee, with social security and medicare deducted from their paychecks. For someone working for themselves, the limit is $400 a year, so you'll be well above that and will have to file a return. You won't owe income tax, but will owe self-employment tax (social security and medicare).

As a self-employed person, you aren't covered for unemployment compensation. If you mean that you are RECEIVING unemployment from an earlier job, that's also taxable income and since you'll be filing, will have to be reported to the IRS on the same tax return as you file for your tutoring income. If your total income for the year is over $5450 if you are a dependent, $8750 if you aren't, then you'll owe federal income tax, otherwise you won't.

Legally you should be reporting the tutoring income to the u.c. people. In most places, you are allowed to make some minimum amount of income without affecting collecting unemployment - I don't know what the CA rules are though..

Answer 3

If you earn $2,000 tutoring, you are required to file a tax return and report this income as self-employment income. If this is your only income, then you will not owe income tax, but you may have a balance due because you have to pay about $300 of self-employment taxes (Social Security and Medicare).

If you are receiving unemployment, that is also taxable and must be included on your federal tax return. What your state unemployment office will do regarding your tutoring, you'll have to ask them.

If you are over 24 and under 65, your low income may qualify you for some Earned Income Credit. This might cover your self-employment taxes and you may owe little or no tax.

But, you have to file. The H&R Block person probably said something like "If you have wages....you don't have to file or pay tax." But you are self-employed, which is different.

Answer 4

Find another preparer.

Your filing requirement for self-employment income kicks in at a mere $400 a year.

If you earned only $2000, the SE Tax would be $283. There wouldn't be any income tax yet.

Also, ignore any comments that say you don't have to report income below $400 or $600 or $1600. While a payer doesn't have to issue a 1099-Misc for amounts less than $600, they still can and even if they don't send a form at all, it's STILL INCOME to the recipient.

Answer 5

If you are an American citizen, you work for an American company, and you live in the USA you do not owe Income Tax.

Answer 6

I think you should ask what other tutors who are in similar situation do for their IRS filings. Ask in the bb/forum. Go to site where many tutors hang out: http://www.tuitionplaza.com/bb/default.asp

Answer 7

I work as a freelance interpreter for companies who need foreign language interpretation. They told me this year that if my income for the year is under $600, then they're not obligated to send me a W-2. I'm not sure if $600 is the limit but it sounds likely.