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To: newgeezer
Next Tuesday, my 16-year-old son will get his second opportunity in as many years to send “big bucks” (for him) to the IRS.

He’s worked the past two summers mowing lawns for a large residential real estate developer. They pay him on a 1099. Therefore, although he doesn’t make enough to pay income tax, he does have to pay self-employment tax (e.g. both halves of FICA).

Since he doesn’t have a checking account, he’ll be handing me ~$150 cash so I can write the check on his behalf.

Really? I thought the threshold income EVEN FOR FILING was 8000 dollars for a single person, which would equal 16% * 8000 = about 1280 dollars. If he is paying 150 dollars on 16 (15.5%?) then that is gross income of only about a thousand dollars. He should keep the money and just not file. Then again, I may not have all the picture.

76 posted on 04/16/2007 8:19:11 AM PDT by DreamsofPolycarp (Ron Paul in '08)
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To: DreamsofPolycarp
He should keep the money and just not file.

Not filing would be not only immoral but doubly unwise, given that his earnings were reported to the IRS on Form 1099-MISC.

Then again, I may not have all the picture.

It sounds like you're thinking only of income tax. As you suspected, he's under the threshold and does not pay income tax.

What he's paying is the self-employment tax on Schedule SE. Like I said, that's basically both halves of the Social Security tax (15.3% of his earnings). As you may know, there is no minimum threshold for exemption from the self-employment tax. For Social Security, the gov't taxes the first dollar we earn.

79 posted on 04/16/2007 10:41:52 AM PDT by newgeezer (Just my opinion, of course. Your mileage may vary.)
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