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July 26, 2011, 12:25:08 AM *
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Author Topic: Are you considered self employed if you make money online?  (Read 15 times)
BAnderson
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« on: July 21, 2011, 06:03:41 PM »

I'm an 18 year old full time student. Let's just say I made $3000-$4000 a year doing miscellaneous things online (surveys, offer websites, etc.). Am I required to file a return and pay taxes on this? There's lots of conflicting information online, but it says if you're self employed and make more than $400 a year you must, is this considered self employment? I ask because several other things say you only have to file if you make above $5,700 or $9,300.
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Baba_Yaga
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« Reply #1 on: July 23, 2011, 07:44:42 PM »

That depends...

If a man claims to have seen sasquatch, does sasquatch then need to file taxes?

Think about that for a while and you'll have your answer.

P.S. Just to help you along, we have no way of knowing where sasquatch got his birth certificate or whether or not he receives free health care.
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Patrick
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« Reply #2 on: July 24, 2011, 01:35:54 PM »

as a full time student, your parents are going to claim you on their taxes, so don't worry about it. you arent making enough money online to make a dent and the tax break your parents will be getting is worth much more
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card_ron
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« Reply #3 on: July 24, 2011, 04:00:05 PM »

The money you are making online is considered income from self employment.  You are required to file a federal income tax return if your total income from self employment for the year is $400 or more.  While you will likely owe no federal income tax, you will owe self employment tax of approximately 13%.

The $5,700 and $9,300 figures you are reading about are minimum amounts of income from wages which require filing a tax return.  The floor for self employment income is much lower.
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tro
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« Reply #4 on: July 24, 2011, 04:37:26 PM »

of course,
the $400 amount refers to your 'net' amount(income less business expenses) on sch C
you have to also file a Sch SE to calculate your self employment tax on that amount and more
in your case you are exempt from income tax on $5800 but the self employment tax is entirely separate and payable regardless of your income tax liability
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Judy
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« Reply #5 on: July 25, 2011, 03:51:09 AM »

Yes it's considered self employment and you'll owe self employment tax, for social security and medicare, if you make over $400.  The 5700/9350 limits are for owing income tax, which is a separate, additional tax.
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