@iShop123 wrote:
ANY money made is reportable, regardless of the amount. If you did a single $3 phone shop for Company A last year, that $3 is taxable. Keep good records.
@walesmaven wrote:
But you do pay SE taxes.
@walesmaven wrote:
When you get to be the age for Medicare, you will be glad.
@mystery2me wrote:
Separating reibursements vs. fees on your spreadsheet is an excellent idea.
Because Social Security and Medicare taxes are taken out before anything else. You cannot deduct anything that could lower those taxes. It's 15.3 % off the top from your gross.@ceasesmith wrote:
Again, why pay social security and medicare taxes on money you don't have to?
@ceasesmith wrote:
Why do I feel like I'm beating my head against a brick wall?
Why pay social security/medicare on gross when you are allowed to pay it on net?
@BirdyC wrote:
John, if you "take in" $20,000 (your gross), but after expenses the number is, say, $14,000 (your net), you pay taxes on $14,000, which is what your Schedule C will report as your taxable income. Not $20,000.
@johnb974 wrote:
Unlike Federal taxes, where you don't pay any, if your income is below $12,000, you always have to pay Social Security and Medicare taxes. There is no way to reduce those taxes. That's a good chunk off of my income.
@johnb974 wrote:
As an Independent Contractor, any money over $600 is reportable as income. But I don't make enough to get taxed on it. I guess the issue of reporting fees as an income wouldn't matter. We also pay both sides of the Social Security and Medicare taxes. There does not seem to be a way around that.
@johnb974 wrote:
Because Social Security and Medicare taxes are taken out before anything else. You cannot deduct anything that could lower those taxes. It's 15.3 % off the top from your gross.@ceasesmith wrote:
Again, why pay social security and medicare taxes on money you don't have to?
@BirdyC wrote:
Of course you can't, unless you make no profit at all....
As someone else pointed out later, though, any and all self-employment income is reportable for tax purposes. Where the $600 comes in is that that's what triggers a 1099 from a client.
@johnb974 wrote:
It is reportable, but it doesn't mean you pay taxes on it. With the $12,000 of the Standard Deduction for individuals, you won't pay any Federal income taxes. For Social Security and Medicare taxes, the Standard Deduction does not apply.