Can someone please explain to me what nonemployee compensation mean? It's box 7. Underneath it says $10,058. Kind of worried because I'm not stripping anymore! Is that how much I owe?!?
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Can someone please explain to me what nonemployee compensation mean? It's box 7. Underneath it says $10,058. Kind of worried because I'm not stripping anymore! Is that how much I owe?!?
No that would be how much you were paid. This sounds like a 1099 or possibly a W2. Have you never done taxes before?
I have never! I don't know the first thing about taxes to be honest! Sorry if I sound like a total idiot lol.
No, I didn't mean to come off harsh... Sorry! I think you should have someone help you so you don't end up making any mistakes. HandR Block and Jackson Hewitt and all those places only charge a few bucks (maybe 75-150)
Thanks. I'll contact them lol. And don't worry you didn't sound harsh at all. I'm just new to living on my own and dealing with the real world. Ughhhh
I assume from your mention of Box 7 'Non-Employee Compensation' that you ( and the IRS ) have actually received a 1099-misc report of miscellaneous income from a strip club for money you earned at some point in 2013. The basic 1099 form looks like 'Non-employee compensation' essentially means business income.
Because you and the IRS have received this automatic income report, you have no choice but to file a tax return for 2013 and pay the applicable taxes. Because the club has listed your payments as 'non-employee' compensation, you must file your tax return as an unincorporated business. While the 'big box' tax preparers can do this for you, they are likely to charge significantly more than they would charge for a short form 'employee' tax return.
In terms of the amount of tax due, in the absence of refundable tax credits you are likely to owe 15.3% or $1539 in Social Security tax ( a.k.a. self-employment tax ), although this amount may be reduced if you have kept receipts for business expense items ( i.e. dancer costumes, shoes etc. ). At the $10k total income level, you probably won't owe much of anything in the way of income tax if you are able to claim yourself as an exemption. However, that SSI tax payment is due by April 15th i.e. must be paid within the next two weeks to avoid penalties and interest charges.
Since you live in a state that levees its own income tax, they have also received a copy of this 1099 thus you will also be forced to file a state tax return as an unincorporated business. Massachusetts has a flat 5.25% state income tax rate, but if you are able to claim a personal exemption you will probably actually owe little or nothing.
About the only reason that you would not be able to claim an exemption for yourself on your own tax return is if you are a college student under the age of 24 thus still considered to be a 'dependent' of your parents ( even if you are no longer living at your parents' home ). If this is the case, you will probably also owe additional tax money in the form of federal and state income taxes on top of the SSI tax.
Lots more discussion on the topic of dancer taxes in Dollar Den
Do they have a guideline that would deem a college student under 24 an independent, rather than dependent? For example all my friends who are under 24 are still considered their parent(s)' dependents and have to use their parents info on financial aid, but I am considered an independent student. They ask you a series of questions like if you've ever been emancipated, or in legal guardianship w/someone other than your parents between a certain age, etc. There's several questions and if the answer to one is "yes," and you can provide documentation they deem you independent so the financial info of your parents isn't taken into account. Hopefully I could be deemed independent for my taxes.
criteria required for establishing independence for FAFSA purposes ... from
(snip) Being considered an independent student is not merely a matter of being responsible for your own educational expenses. You must meet certain criteria to be declared an independent student for the purposes of the FAFSA:
Be 24 years of age or older by December 31 of the award year;
Be an orphan (both parents deceased), ward of the court, in foster care or was a ward of the court when 13 years or older;
Be a veteran of the Armed Forces of the United States or serving on active duty for other than training purposes;
Be a graduate or professional student;
Be a married individual;
Have legal dependents other than a spouse;
Be an emancipated minor or in legal guardianship;
Be a homeless youth;
Be a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances.
Changing Your Status
Dependent students may change their status, but it’s not easy. You start by filing a Dependency Review Form, which can be requested from a financial aid administrator at your school. You also must provide documentation explaining your situation. Your case is then reviewed by a committee or financial aid office at your college.
Keep in mind that most students will not qualify for a change in status. Circumstances tend to be extreme (such as abandonment or physical abuse) to warrant the change. Simply residing in your own apartment or house is not adequate justification.(snip)
Since the IRS doesn't move in lock-step with FAFSA, to be able to claim yourself on your own tax return ( thus also claim the tuition tax credit on your own tax return ) the student must pass the IRS 51% support test. This essentially requires that the student must show sufficient reported income to 'explain' how they were able to cover tuition costs, other college costs like books and fees, housing costs, and basic costs of living etc without receiving large amounts of money from parents.