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Need to pay tax on payment I accept through credit card. Help!

I am a minor and...

I am a minor and run a business and except credit cards through intuit merchant account. About 10,000 a year. However I do it under my own name and not a filed business. This will be the first year I ran the business and will need to pay taxes. As far as the credit card transactions when I signed up for the merchant account we used my moms social security number but my name as the Doing business as name. Because I have another job as well I pay taxes under my own name and social. What do i need to do so the irs sees the money I got through credit cards as money I need to pay taxes in not my mom.

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Answered in 2 minutes by:
10/30/2012
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7,245
Experience: Extensive Experience with Tax, Financial & Estate Issues
Verified

Stephen E. Grizey :

Was the reason you used your mother's social security number because you couldn't use your own number as a minor?

JACUSTOMER-kg0h8wod- :

Yes, because it required a contract to sign

Stephen E. Grizey :

Are you talking about 2012 transactions?

JACUSTOMER-kg0h8wod- :

Yes, which more will be made by end of year

Stephen E. Grizey :

The question is whether or not there will be any 1099 information returns filed by Intuit using your mother's social security number.

JACUSTOMER-kg0h8wod- :

Intuit will issue a 1099-k. They do inform the IRS

Stephen E. Grizey :

Yes but the 1099-Ks don't get treated the same way.

JACUSTOMER-kg0h8wod- :

How are they treated. I am not familiar with these things

Stephen E. Grizey :

What you will have to do is that your mother will need to report the 1099-K information as coming in to her & then showing being transferred to you with your social security number.

JACUSTOMER-kg0h8wod- :

Ok, how would we show that since the money is deposited into my bank account from intuit and it's not a custodian account. Only my name is ***** *****

Stephen E. Grizey :

You will need to prepare a Schedule C as part of your tax return to report the business activity that you have.

Her number is what is matched.

What is a schedule c

Stephen E. Grizey :

My suggestions will be that you will need to take the 1099-K to a tax preparer and have him or her prepare your mother's and your tax returns to avoid matching problems with the IRS & California.

JACUSTOMER-kg0h8wod- :

Ok, thank you

Stephen E. Grizey :

A Schedule C is a form that you must use to report the business activity of an unincorporated business. You may be able to use a Schedule C-EZ. The tax preparer will know which form is best.

How old are you?

JACUSTOMER-kg0h8wod- :

16

Stephen E. Grizey :

What is the nature of your business?

JACUSTOMER-kg0h8wod- :

Freelance programming. As well as selling software I have already made

Stephen E. Grizey :

OK, so the revenue is mostly all for your services.

JACUSTOMER-kg0h8wod- :

Yes

Stephen E. Grizey :

You will owe taxes so don't spend all of your money.

JACUSTOMER-kg0h8wod- :

I don't. I have been saving 30 percent. I have had a job at Apple for the past two years as well, so I have been filing taxes.

So, it is definitely possible to do what I need to do

Stephen E. Grizey :

Good, that's about right. You will have social security & medicare tax to pay. Just like when that is withheld from your regular job.

Only more as you are self employed you have to pay both the employer & employee parts.

JACUSTOMER-kg0h8wod- :

Ok,

Thanks! :-)

Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7,245
Experience: Extensive Experience with Tax, Financial & Estate Issues
Verified
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