Free Republic
Browse · Search
News/Activism
Topics · Post Article

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.)
[ Post Reply | Private Reply | To 76 | View Replies ]


To: newgeezer
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.

Nope.

Generally, if you have less than $400 of SE income you don't have to pay any SE tax. So, at $399.99 of SE income, the SE tax is zero. At $400.00, the tax will be $400 * 92.35% * 15.3%, which is $56.52.

80 posted on 04/16/2007 11:24:48 AM PDT by AntiScumbag
[ Post Reply | Private Reply | To 79 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson