taxes on self employement income under $400?

Question

I am working part time for a small business contract work. How much can I earn and not pay taxes? I know there is a $400 rule is that just for SS?

Thanlks. I understand the detail about reporting it as income. This is extra above my regular job. I am just curious about the payment to SS tax. I wanted to clarify the rule on $400. Since I am close to that amount and can get paid the remainder next year for my service

Answer 1

If your total income for the year was less than $600 then you would not have to pay taxes. Remember that is for the year, not for a pay period. If you had more than one job, and those jobs together added up to more than $600, you would still have to file taxes. If there were any taxes paid for that small amount, they would probably be refunded.

Answer 2

If that's you ONLY income for the year you won't need to file. The $400 rule applies to self-employment taxes. If you earn less than that from self-employment but have other taxable income you must claim the self-employment income as ordinary income for income tax purposes regardless of the amount.

Ignore the answer that talks about $600. That's the amount that businesses must cut Forms 1099 for payments to contractors. It has nothing to do with your tax liability or filing requirements.

Answer 3

If you make over $ 400 you have to file and pay Self-employment social security tax. If you made a million dollars from salary and only $ 400 from self-employment, you would still NOT owe self-employment tax, but, of course, would have to file a tax return.

If $ 400 is your only income, no tax return at all is required.

Answer 4

Go to irs.gov.
It will explain. All earned income is taxable. It depends how much you earn overall to calculate taxes.