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Unfortunately, this income will need to be treated as self-employment income and you will have to pay self-employment tax. The self-employment tax is social security tax
tax for small business owners. Anytime you work for someone and they do not give you a W-2, you are treated as if you are a small-business owner. The tax rate is 13.3% of your net modeling income (the total 8,200 dollars minus deductible work expenses). This tax is completely different from regular income taxes
Unless you have other taxable income
, there will not be any Federal income taxes due because your total income is lower than your standard deduction
and your exemption.
There is good news about the self-employment income though, you will be able to deduct some of your unreimbursed work related expenses. This will reduce your self-employment tax. For example, you may be able to deduct a portion of your rent and utilities if there is a space in your home that you use exclusively for your modelling work. Other deductible expenses may include, internet fees, depreciation on your computer and camera equipment, etc. This IRS publication will be a useful guide for your deductible work expenses (http://www.irs.gov/publications/p535/index.html). It may be advisable to find a local
CPA, enrolled agent, or register tax return preparer when you prepare your 2012 tax return in 2013.
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