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PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4675
Experience:  35 years tax experience, including four years at a Big 4 firm.
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1099-MISC is being treated as a business (Schedule C) on a

Customer Question

1099-MISC is being treated as a business (Schedule C) on a free online tax service. This was income from babysitting. Is this right? Total annual income for 2014 was roughly $8K which I thought fell into the 'not taxable' category.
Submitted: 2 years ago.
Category: Tax
Expert:  PDtax replied 2 years ago.

Hi from just answer. I'm PDtax, and can assist.

Expert:  PDtax replied 2 years ago.

Self employment income has a much lower threshold to be reported. If you have this type of income above $400 in taxable income, it has to be reported. That's because the self employment tax kicks in much earlier.

Expert:  PDtax replied 2 years ago.

The good thing about self employment income is many expenses are deductible from it. Travel to and from the job, supplies, and many other deductions that employees do not get to claim can reduce the self employment income and its tax.

Expert:  PDtax replied 2 years ago.

Thanks for asking at just answer. Positive feedback is appreciated. I'm PDtax.

Customer: replied 2 years ago.
But if ur total income is $8k and considered nontaxable why when u I report the babysitting $ do I owe $200?
Expert:  PDtax replied 2 years ago.

Self employment income is subject to two levels of tax. That income is subject to a self employment tax rate of 15.3%, which paid the social security and Medicare taxes you might be used to as withheld from a paycheck. The second is income tax.

Expert:  PDtax replied 2 years ago.

Your total income might not be taxable, but there is self employment tax to be collected on your self employment income. IRS collects both on the 1040 you are filing.