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Confusion About Filing Tax Return as a self-employed individual

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m2185

Junior Member
What is the name of your state? Michigan

I'm using TurboTax to file my tax return this year. This is my first year filing (19 years old, fulltime college student). I did a good deal of freelance work last year and made (before expenses) roughly $4400. After expenses, that goes down to about $2800. I also made $728 in work study money. The place I did the freelance work through (RentaCoder) will be sending me a 1040 pretty soon, as will my work study employer. Now my question concerns wages. I put down my business profit ($2800), and then my $728 in work study, but do I also put down the $2800 as wages? Because when I do that, TurboTax says my adjusted gross income is $6100.....which is clearly more than I actually made. I'm very confused about this detail. Can anyone help?
 


FlyingRon

Senior Member
Rentacoder will send you a 1099 for EVERYTHING they paid out to you whether it be your fee or expenses. This goes on schedule C which lets you pull off the expenses off the top. The bottom line (2800) from sched C carries over to the main 1040 income section.

Your workstudy wages will result in a W-2. This gets entered directly on the 1040 income section.

TurboTax should handle this as a matter of course. I think you're screwing up because you're entering the $2800 twice, once under wages and once as the carry over from the sched C.
 

m2185

Junior Member
Yes, I see that's what it was. I took the earnings from the freelancing out of the W-2 section and things worked out better ($3300 AGI). But I do have a question: I am being claimed as a dependent by my parents. Does this mean I cannot take a personal exemption when it comes to paying my state taxes? I notice that if I made less than the personal state exemption amount ($3400), I can claim an exemption and not have to pay state/city income taxes. But can I still take the exemption as a dependent?
 

LdiJ

Senior Member
Yes, I see that's what it was. I took the earnings from the freelancing out of the W-2 section and things worked out better ($3300 AGI). But I do have a question: I am being claimed as a dependent by my parents. Does this mean I cannot take a personal exemption when it comes to paying my state taxes? I notice that if I made less than the personal state exemption amount ($3400), I can claim an exemption and not have to pay state/city income taxes. But can I still take the exemption as a dependent?
You are really getting confused.

You are a dependent of your parents. You MUST indicated that to Turbo Tax or you will cause problems on your parent's return, and will end up having to amend yours. Since amendments are quite difficult to do, and cannot be done electronically, you would end up having to pay someone to amend your return. Get it right the first time.

You aren't going to owe any federal income taxes, (because your income is below your standard deduction) but you will owe self employment taxes on the 2800 profit. That will be around 430, less any federal taxes that might have been withheld from your work study income.

You may also owe a small amount of state tax.

To get back to your freelance work. You will be entering the entire amount of the 1099 that you receive (4400) and the deducting your specific expenses to arrive at 2800. If you follow turbo taxes instructions precisely, you won't mess up your return.
 

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