<p>he wasn’t self employed.</p>
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<p>Companies send out 1099’s for self-employed (independent contractors) and W-2’s for employees.</p>
<p>Whether classified correctly or not, the 1099 that he received indicates that he will owe self-employment tax, and therefore, needs to file taxes under part C above.</p>
<p>If it was an incorrect classification, then he can try to get reclassified. He’ll still need to pay FICA - retroactively - but only half of the amount that he would have as self employed.</p>
<p>^^Based on the information provided by the OP, I agree with babyontheway.</p>
<p>^^It does sound that the 1099 OP’s son got was for his contract programming work. I agree with babyontheway and swimcatsmom: he needs to file. Babyontheway’s post explains why.</p>
<p>If he had expenses related to the job including tools, equipment, mileage, etc. he will be able to deduct those expenses (as long as they are reasonable) furthere reducing his tax liability. They will be reported on the Schedule C.</p>
<p>Thanks for all the posts! 
The time difference between us is at least 12 hours, hence I did not get back earlier.</p>
<p>He got a 1099 Misc, and the amount appears in Box 7. He, while at USC worked on projects (iphone apps) with 2 companies on an hourly basis and then got hired by one of them where he is now working full-time (USC not involved).</p>
<p>So, does this complicate matters further because he is now an employee in a true sense?</p>
<p>Also, I read somewhere that he now has to pay double the amount (his and the employers share) for the social sec taxes!</p>
<p>I don’t think he has to pay any federal taxes. He had no expenses as such towards the income as he lived in the USC Dorms.</p>
<p>No, it doesn’t complicate things further. As soon as he received a 1099 for more than $400 of work, he needs to file taxes based on our tax code. He will have a few different places to enter his earnings based on the number and dollar amount of 1099 and W-2s, but the TurboTax will handle all of that for you.</p>
<p>Yes, people paid under 1099 (independent contractors) must pay both the employees and employers share of FICA (social security). For 2010, it was 6.2% each, so he will have to pay 12.8% for social security. </p>
<p>Again, you can just input all the info into TurboTax and it’ll calculate everything for you.</p>
<p>OP, please note there could be state and local tax obligations too. Don’t know if your version of TT includes the state component, but you may want to look into that. Turbo tax won’t do local taxes (that I know of), and that may be a call he needs to make.</p>
<p>pixeljig, your son has to check if he needs to file CA state tax (I’m only familiar with MA state taxes). If he does, he can download a state tax add-on for TurboTax from Intuit for a fee.</p>
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<p>Writing stuff off as business expenses can get tricky. He needs to keep all receipts (in case of an audit) and make sure that the expenses were strictly job-related and never used for personal purposes (e.g. a computer to do college homework).</p>
<p>As long as people are asking these questions, I have related one. </p>
<p>My youngest child had a summer NSF funded REU position last summer and was paid a stipend from which income taxes, social security, medicare and state income taxes were withheld. S/he also was given other money to defray room&board expenses for the 10 weeks of the REU. (Quite often REUs based at universities provided room&board for participants on the university campus, but this program decided that the university was going to charge the program too much for university room&board and elected to house the students in private lodging near campus and let them cook their own meals and provided a fixed amount of money to pay rent and purchase food). In January the university issued a W-2 covering the money from which taxes were withheld and a 1099-MISC with an amount in box 7 for the money used to purchase lodging and food – box 7 is the place for non-employee compensation. Last summer the participants were told that the room&board money was “not taxable”. </p>
<p>We are not sure what to do with the room&board money. We can either not report it as earned income at all (the impression the program gave the participants last summer, and my child’s chosen solution – problematic since the 1099 was issued) OR we can report it as 1099 income – and here we also have choices – Taxcut asks if it is income from “a one time or sporadic event” as opposed to “a full time or part time job” or “a business you own or self employment” or other even less applicable choices. How we answer this question seems to affect the remaining questions Taxcut asks – in some cases a Schedule C and more are generated and in other cases the room&board money just shows up on the 1040 as additional income.</p>
<p>If the room&board money is really self-employment income then I’m not sure what if any of the actual living expenses for the 10 weeks can be written off against the income – and the Schedule C will be needed to write off whatever we can write off. </p>
<p>More income taxes were withheld than will be due in any case – so s/he wants to file a return to recover the excess withheld. Furthermore, my student has a small amount of income from part-time employment during the year as well, so that if the room&board money counts as income, then the $5700 threshold is crossed. </p>
<p>Any insight from you more experienced parents/taxpayers?</p>
<p>You will need to talk with a tax consultant or spend some time reading the IRS publications to figure out exactly what applies in this case.</p>
<p>On one hand, for the vast majority of people, room and board is paid out of after-tax dollars. We don’t get a tax credit for rent or for our food expenses!</p>
<p>On the other hand, when on a business trip, you can get paid a per diem that is not taxable.</p>
<p>Which applies to you is based on the specific situation: whether the job was temporary in nature, whether the persons place of residence was different than where they were living for the job (place of residence is different than permenant address), etc, etc.</p>
<p>I was filing my return and realized that I can claim his income under mine (he is less than 19 and my dependent).</p>
<p>Income is less than 5700. </p>
<p>I hope I am right.</p>
<p>But why would you? Then it will be taxed at your tax rate which will likely be higher. If the income is less than $5700 then he will pay no federal income taxes on it if you do a return for him. If you claim it on yours then you would pay taxes at your rate. </p>
<p>You can still claim him as a dependent on your taxes and get the dependent exemption of $3650. If he files his own return he still gets the standard deduction of $5700. He just doe not get the additional personal exemption of $3650 as you are claiming him as a dependent. (they personal and dependent exemptions are basically the same thing - it is called a personal exemption if you claim it for yourself, a dependent exemption if you claim it for another person).</p>
<p>You COULD claim his unearned income on your return, but not his earned income. If he received a 1099MISC the IRS will be looking for a return from him for that income. You don’t want to hear from them. You are correct that there will be no income tax due because it’s under $5700, but there WILL be self employment tax due. I repeat: you CANNOT put that on your own return.</p>
<p>On TurboTax it says that ‘earned’ and ‘unearned’ for less than 19 year olds can go on parents return as long as its less than 5700.</p>
<p>Would the IRS want to see his income seperately as his only? I am so confused!</p>
<p>I have no income.</p>
<p>You cannot pay his self employment taxes on your return. He must file or hear from the IRS. You may have no income, but if qualified tuition was paid by him, you or from loans, you can get the refundable portion back. He cannot. File both.</p>
<p>Okay, I think I get it now, thanks so much! :)</p>
<p>Still think you’re better off filing for an extension, include what you expect he owes in it, and then give yourself more time to look at all the angles. Find out if he has to file state and local returns and get extensions there also and then work out the whole picture.</p>
<p>I agree with Dad<em>of</em>3 that you should file an extension and then spend sometime to figure this out. It looks that you or your son can claim the American Opportunity tax credit which can mean a refund of $1000 or more even you/your son might not have any tax liability.</p>