I am a 17 year old. In 2010, I have made a total of $7106.63 by running a small blog online, and being a part of affiliate programs. I received my 1099-MISC’s in the mail and I am ready to file my taxes for the first time. My father still claims me in his taxes, but I plan on having my taxes managed separately through his tax preparer. I know that the Self Employment Tax is 15.3%, but what other taxes will I have to pay? I live in Nevada. How will I be able to pay the IRS? How does that work?
Can I also deduct:
-Domains I registered
-Computers
-Desks
etc.?
Please help! This is all new to me! Thanks!
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Help! Tax Help Questions!?
Posted on March 5, 2011.
In addition to SE tax, of $1004
7107 – 502 = 6605 – 5700 = 905 or tax of about 90.
$1004 + $90 = 1094.
You write a check.
As for deductions, “small blog” and “affiliate program” do not let you write off much. domains, yes. depreciation on computer (if you kept a time log and can identify % of business use), not so much. Desk, no.
“I plan on having my taxes managed separately ” – You HAVE to do it separately, you have no choice.
You pay SE tax, federal, and state tax.
You pay what you owe by check.
You can deduct business expenses. This is what you tax preparer is for.
Key words are good detailed records of all ordinary and necessary expenses of the business operation and a daily detailed mileage record or log of all business miles and all personal mileage that the vehicle is actually used for each purpose to help you determine your actual percentage of business use and in the event that you need the written records at some future time you would have them available to you.
All of your gross income from all sources of worldwide income will be reported on your correctly completed 1040 federal income tax return.
Using a receipt book to make a receipt for each time that any one pays you in any way or item or trade for the amount of $$ value that is received at that time and totaling the gross self employed income for the tax year with any other 1099-MISC income that is received after the end of the tax year and entering the total gross $$$ value amount on the schedule C line 1 GROSS receipts from your trade or business
In general, taxpayers may deduct the ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.
You would have to be sure that you handle your business deductions correctly for your business operation.
For instructions and forms go to the IRS.gov website and use the search box for publication 334 a very good place to start with examples.
Publication 463 Travel, Entertainment, Gift, and Car Expenses
Use the search box at the http://www.irs.gov website for Small Business and Self-Employed Tax Center
Filing Season Central is your one stop assistance center for filing your business returns. This includes Highlights of Tax Law Changes, Tax Tips, and more.
2 of the seven tax tips for starting a business enclosed below.
#4 Good records will help you ensure successful operation of your new business. You may choose any record keeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.
#7 Visit the Business section of the IRS gov website for resources to assist entrepreneurs with starting and operating a new business. Go to the IRS gov website and use the search box for the below referenced material
*Starting A Business
*Operating A Business
*Closing A Business
*Publication 4591, Small Business Federal Tax Responsibilities (PDF 470.1K)http://www.irs.gov/http://access.wa.gov/business/taxes.aspx
Hope that you find the above enclosed information useful for your situation and good luck to you.
call 1 800 829 3676 and request publication 334 to help you determine your expenses
a recent webinar I attended specified that expenses have to have a business purpose to be claimed on sch C where you will report your income and expenses
and yes, the domain registration is definitely an expense, the computer and desk depending on useage may or may not be attributable to the business( exclusivity is key here)
yes, your self employment tax is approx. 15.3%
half of the se tax is a credit to reduce your gross income
and you are able to claim up to the amount of your standard deduction as non taxable(your personal exemption is used by your parents)