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Thread: 18 year old living at home who has NO idea about taxes- help please!

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    Default 18 year old living at home who has NO idea about taxes- help please!

    Hello!
    So, i'm one of those stupid 18 year olds that jumped into this without a thought of taxes. They weren't even on my radar. And all of a sudden the realization that they exist and that I know NOTHING about them hit me and i'm at a loss at what to do.
    I've been on this forum for a whole 2 days and I looked up taxes, and got to this forum, and tried to figure things out but i'm just completely lost. so i'm not being lazy- I KNOW that SW is a goldmine of info, I just don't know how to find what i'm looking for, if I DO, I have no idea what it means!

    I'm in a situation where I live at home with my parents and if they found out they'd probably disown me. I was told that this is bad bad bad, because if i'm still under their tax coverage that something bad is going to happen but i'm not quite sure what?

    I haven't even saved any money aside for taxes! all of it has gone towards paying off my debt for the computer I needed for school.
    ANY guidance would be SO appreciated. I'm super scared.
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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    If your parents are claiming you as a dependent (which they most likely are since you're only 18 and still living with them), you can't just file separately for your dancer earnings. That'll cause a world of issues with the IRS. You either have to come clean with your parents and be able to pay taxes or keep it secret but also not pay taxes because of it. The latter is bad because it means you're not paying taxes on income earned, and if you get caught, you're in a heap of trouble - and so are your parents since you're their dependent.

    I mean, if your club doesn't issue 1099s and you can come up with a plausible cover story of a job that pays you that much in cash, you could go to your parents with that and be able to file for that income, I suppose. If your club files 1099s, you really need to tell your parents about what you're doing though.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    I mean, if your club doesn't issue 1099s and you can come up with a plausible cover story of a job that pays you that much in cash, you could go to your parents with that and be able to file for that income, I suppose. If your club files 1099s, you really need to tell your parents about what you're doing though.
    First of all- thank you so much for the honest and helpful reply.
    Something important that I forgot to mention is that i'm Camgirling, not club dancing.
    I'm not sure if that changes anything.
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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    you are going to have to come clean..trust me, parent troubles are better than IRS troubles. you don't want to get your parents audited and penalized.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    you are going to have to come clean..trust me, parent troubles are better than IRS troubles. you don't want to get your parents audited and penalized.
    oh god. this is terrible.
    But, thank you for your response.
    So- just to clarify-
    there is absolutely NO way to stop being a dependent and file my own taxes and have it be none of my parent's problem?
    Sorry to be annoying, I just NEED to know that this is my only option.
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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Quote Originally Posted by PrincessXOXO View Post
    So- just to clarify-
    there is absolutely NO way to stop being a dependent and file my own taxes and have it be none of my parent's problem?
    Sorry to be annoying, I just NEED to know that this is my only option.
    There is - you tell your parents you don't want to be claimed as a dependent and want to deal with your taxes yourself. Then they will ask why, especially if you don't have a job (as far as they know) or even a cover job with income to even declare.

    Does the website you cam for issue 1099s?

    Check out this thread for info on taxes as a camgirl: https://www.stripperweb.com/forum/sh...still-worth-it

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    There is - you tell your parents you don't want to be claimed as a dependent and want to deal with your taxes yourself. Then they will ask why, especially if you don't have a job (as far as they know) or even a cover job with income to even declare.

    Does the website you cam for issue 1099s?
    My parent's think i'm a freelance website designer/maintainer as well as tech support. I have actually done some tech support for money, as well as a website. So that's how I describe to them the checks that come in.

    MFC says: 1099 tax form
    After the end of each year, before January 31, if you have earned over $600.00 in the previous year, we will send out a 1099-MISC Tax Form which will contain the total income you have received during the prior year from our company. This will help you file your annual tax returns. A copy also gets sent to the IRS.

    I'm trying to be as rational as possible and figure this all out without panicking- but it's hard! Thank you ladies for taking the time to answer.
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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Update:
    I have made the decision to move out, since I have enough time and the resources to make it happen.
    Expeditionist by nature.
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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Quote Originally Posted by PrincessXOXO View Post
    Update:
    I have made the decision to move out, since I have enough time and the resources to make it happen.
    Given your age and student status, your parents can still claim you as a dependent regardless of whether you live with them or not, so be sure to get on the same page with them about the tax situation. Also - when did you start camming? Before April 2013? If so, MFC would've sent the IRS a 1099 earlier this year, and you'll be on the hook for that. If not, you'll be fine for now, but start putting aside 30% of your earnings for next year's taxes.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Quote Originally Posted by PrincessXOXO View Post
    My parent's think i'm a freelance website designer/maintainer as well as tech support. I have actually done some tech support for money, as well as a website. So that's how I describe to them the checks that come in.

    MFC says: 1099 tax form
    After the end of each year, before January 31, if you have earned over $600.00 in the previous year, we will send out a 1099-MISC Tax Form which will contain the total income you have received during the prior year from our company. This will help you file your annual tax returns. A copy also gets sent to the IRS.

    I'm trying to be as rational as possible and figure this all out without panicking- but it's hard! Thank you ladies for taking the time to answer.
    I believe the 1099 says "mfcxy" so you may still be able to get away with saying you do freelance work! (It is after sort of freelance work).

    But moving out and being on your own is often a good idea I think!


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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Backtracking to try and resolve a key question ... are you a college student ? If so, then even if you move out on your own, your own income and taxes cannot be automatically separated from your parents' income and taxes if you are under age 24. Where a college student is involved, regardless of the student's income level relative to the parents, FAFSA and the IRS mandate that the student be treated as a dependent of the parents.

    Being considered to be a dependent of your parents results in the following ...

    - tax returns for both the parents and the student must be prepared in a 'co-ordinated' fashion. This usually means that your parents, and their accountant, need to be made aware of the actual sources and exact amounts of your camming earnings via sharing your 1099 information.

    - FAFSA student loan / grant applications must also be prepared based on combining the parents' income details and the student's income details

    - a student camgirl who is a dependent of her parents cannot claim the IRS personal exemption for herself - the parents must claim it. This effectively lowers the parents' amount of taxes due by $3-5,000, but raises the student camgirl's amount of taxes due. Thus a student camgirl living in a state with a high income tax rate like California may need to set aside 30%-35% ( or more ) of her pre-tax income to cover federal income taxes, state income taxes, social security ( aka self-employment ) taxes, etc. ... depending on the amount of her total annual earnings.


    It IS possible for a student camgirl under the age of 24 to 'emancipate' herself from her parents and thus break the link between parents' and camgirl's incomes, tax returns, etc. However, in the absence of getting married or joining the armed forces, this boils down to being able to prove to a judge that you are totally capable of supporting yourself. To do that in California essentially requires ...

    - living on your own, without roommates

    - establishing the existence of a 'verifiable' income sufficient to cover all of your school and living expenses ( after taxes )

    - NOT applying for any type of state social welfare benefit ( food stamps, MediCal, etc. )

    ^^^ this is actually a 'tall order', since the judge is likely to want to see 'proof' that the person petitioning the family court for 'emancipation' has been successfully earning substantial amounts of money and living on their own for some period of time. I am told that California is a P.I.A. about emancipation cases, due to the fairly high number of child 'stars' who have brought such cases in the past over the objections of their own parents. Thus the reality is that it is extremely doubtful that you could successfully establish a history of living on your own, bring an 'emancipation' case to family court, and receive a favorable court ruling between now and the end of 2013 ... and particularly so if living on your own can only be done if self-employment and income taxes owed by you remain unpaid.


    Back to your current tax situation, since you didn't offer any details all I can do is offer a scenario based on assumptions. So here goes ... assumption that you started camming last June after finishing HS, and that you are earning perhaps $500 a week from camming. This would forecast 30 weeks of 2013 income totaling $15,000 by the end of the year, which your webcam host will report to the IRS via form 1099, and also report to the California Franchise Tax Board. Also, even if you were to quit camming today, if you have already earned more than $600 during 2013 your webcam host will still be required to issue a 1099 form for whatever amount of money you have already earned during 2013 ... leading to the same parent vs student tax filing and FAFSA student grant filing complications.

    Based on this scenario, and not being able to claim an exemption for yourself on your tax returns, you would absolutely owe 15.3% * 15,000 or ~ $2,300 in social security ( aka self-employment ) taxes. In addition you are also likely to owe something like another $2,000 in federal income taxes plus yet another $ 700 in Cal state income tax, or a total of about $ 5,000 in taxes on your $15,000 of expected 2013 camming income.

    So before you decide to move out on your own, I would highly recommend recalculating with the knowledge that about 1/3rd of your previous and future camming income is going to be claimed by the IRS and Cal Franchise Tax Board. In fact, while an IRS exemption exists for this, technically speaking by this coming September 15th you should be prepared to file a 1040-ES quarterly estimated tax form with a $4,300 * 12/30 weeks = $ 1,720 check to the IRS, plus filing a 540-ES quarterly estimated tax form with a $700 * 12/30 = $ 280 check to the Cal FTB. Or put another way by next month, some $2000 of the money that you 'think' is yours, which you might be counting on to pay for moving out on your own, already belongs to the IRS and the Cal FTB ! This fact will NOT be overlooked by a family court judge should you try to seek 'emancipation'.

    Another option is to simply skip making estimated tax payments and choose to report your own camming earnings via your parents' tax return next spring. In essence, this will make your parents liable for covering your own unpaid estimated taxes via vastly reducing the size of the ( combined income based ) tax refund they will receive, or by turning your parents' expected tax refund into a tax BILL. Given that ~$5,000 is at stake ... coming from either your own 'pocket' or your parents' 'pocket' ... if it appears that relations between yourself and your parents are going to head 'into the toilet' over your camming in any case, you may want to go this route to foist your own ~$5,000 tax bill for 2013 camming earnings onto your parents. However, this typically only works once, and typically also adds significantly to the 'hate and discontent' factor since some parents may be forced to 'financially scramble' to come up with an unexpected ~$5,000 between the time they start preparing their 2013 tax return next Jan-Feb-March and the time the money must be paid on April 15th 2014. But another school of thought says that if your parents finding out about your camming is going to result in them 'disowning' you in any case, you might as well pocket the 5 grand !!!

    Some recalculation may also be necessary if your parents' income level is such that adding your own $15,000 to the 2013 FAFSA 'total household income' figure will result in a reduced amount of future FAFSA student grant money, which in turn must be made up for out of your own pocket in 2014.
    Last edited by Melonie; 08-18-2013 at 11:54 AM.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Whether or not you move out, you can file your own taxes separately - I have done it since I was 18 (I'm now 22) and lived with parents for 2 of those years. Despite living with them, I was considered to be providing the required 51% of my own support since I had jobs and was paying for my food, car payments, tuition, phone, etc.

    You have to make sure they do not claim you though, because if both your parents and you claim you as a dependent, the IRS will be knocking. You may have to explain why to them though, as it seems odd to some parents that their kid would want the responsibility of filing taxes. That is what I'd be worried about since you don't want to tell them.

    If you go to school and file the FAFSA, you will have to know their income - however, your parents won't know yours. The FAFSA doesn't send them anything, so it won't give you away. Just know that you'll have to transfer your parents tax info into your FAFSA forms via the website. The FAFSA doesn't give a shit if you filed separately or not, it just wants their income until you turn 24.

    I will tell you to absolutely be honest on your taxes though, as you have 1099s coming, so your income needs to either match or exceed them so as not to raise red flags. Just start setting aside money now in case you get hit with a big tax bill, and also keep in mind that like Melonie said, the more you make, the less eligible you are for grants and the higher your school bill may be... so be prepared to pay a chunk of your school out of pocket.
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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    You are required to be a dependent until you are 25 unless you legally "divorce" your parents through emancipation. However, if they do not provide you with 51% of your support, you are by law no longer their dependent. But they don't know that, and probably won't listen to you if you tell them.

    1.) Save as much money as possible for the taxes. Just don't spend money.
    2.) Save all your receipts. Especially for things like computers or anything deduction-related.
    3.) Have the 1099s go to a street-addressed PO box so your parents don't find them. If you google the name of the company on the 1099, chances are, it will tell you the real name of the company and your parents will be like wtf (i.e. "MFCXY" aka MFC's company, you google it and there will be people saying like MFCXY IS MYFREECAM'S 1099 COMPANY!!! CAM GIRLS!!! LIVE SEX ACTS!!!)
    4.) Tell your parents how much you made (you don't have to tell them what you do). Because if you make more than one of them, then cannot legally claim you as a dependent since you legally have to receive 51% or more of your income from your parents for them to be able to claim you as a dependent. So if you are making more than either of them, that is obviously not possible and the IRS knows that. Then you will both automatically 100% get audited. You will get a letter in the mail (as will they) saying "this social security number has already been claimed by another person" and it will be a mess. But it will be your parents fault, since legally you are correct if you make more than they do. And your parents will be PISSED because the will have to redo their taxes, owe penalties, and owe a lot more money since they just lost out on a big deduction. This happened to me after I told my mom she couldn't claim me and she did anyway. She was pissed, even though it was her fault and I told her she could not claim me.
    5.) If you file for FAFSA or any kind of aid, you will be fucked if you did not do the above. In fact, if you are making good money, you may not qualify for aid at all. Which might not be an issue if you have money saved up for schooling anyway.

    Also, make an appointment with a CPA (an adult friendly one!) asap. And talk this stuff over with them, and have them do your taxes. Its better that way. They only cost like $200-$500 every time you file usually.

    If you are making really good money, you should get your own LLC.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    sorry for the threajack, but glamour is that you in your avi? if so, you are super gorgeous!

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Thank you all so much for taking the time to reply and write everything out. I am a student. I've made something like 3,000 this year because i'm inconsistent as fuck and haven't been trying as hard as I should have and all of those rambles. So far from 15k.

    Here's what i've decided:
    Save like crazy. (and make a side bank account just for tax money)
    Keep tax deductible receipts.
    Stay as a dependent, but pay my taxes, and work on moving out so if my parents DO find out I won't be living with them, and will be more secure in my position.

    I googled "MFCXY" and although myfreecams does show up, the first thing that comes up is http://www.mfcxy.com/ and that is basically the absolute perfect cover for tech support.

    Thank you all so much.
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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    ^If you're paying your taxes as a dependent, therefore via your parents, I assume you will be sticking with your web design/maintenance/tech support cover story? If so, make sure the deductions you want to claim are applicable to that so they don't get suspicious.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    ^If you're paying your taxes as a dependent, therefore via your parents, I assume you will be sticking with your web design/maintenance/tech support cover story? If so, make sure the deductions you want to claim are applicable to that so they don't get suspicious.
    The only tax deductible thing I see myself putting is my computer. Any included receipts would be tech related, too.
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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Quote Originally Posted by simone87 View Post
    sorry for the threajack, but glamour is that you in your avi? if so, you are super gorgeous!
    lol its not, but I do look a lot like that!! Its Iggy Azalea.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    I suggest you talk to a tax professional.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    if you make more than one of them, then cannot legally claim you as a dependent since you legally have to receive 51% or more of your income from your parents for them to be able to claim you as a dependent.
    Just to be technically correct, where college student status is concerned, the 51% support test for dependent status doesn't apply. The law ( IRS code, actually ) says that college students are by definition dependents of their parents until they reach age 24, get married, join the armed forces, or can otherwise prove to a judge that they are 100% capable of supporting themselves without ANY outside assistance, parental or otherwise.

    Thus a college student camgirl can be earning 90%+ of the money being used to support herself and pay for her college tuition, with the parents only providing say 10% via the occasional gift of a few extra bucks, and the girl will STILL wind up being classified as a dependent of her parents if she is under the age of 24. And even in the extreme case where the college student camgirl under age 24 is receiving no assistance whatsoever from her parents, and paying 100% of her own living expenses and college tuition, she will STILL wind up being classified as a dependent of her parents until she successfully petitions the family court for legal 'emancipation'.

    I am told that this situation is the end result of FAFSA and the IRS mutually deciding how the whole student grant money / tuition tax credits etc. mechanism needed to be implemented. Since student grant money amounts are based on 'total household income', being a dependent of the parents vs. being 'emancipated' means far less student grant money eligibility for the student ( since grant money calculations can be based on both the parents' income level PLUS the student's income level vs. just the student's income level ) thus far lower costs to the gov't !!! A similar situation applies where a dependent student may be required to pay 'full' tuition amounts based on her parents' income level, while an 'emancipated' student may be eligible for discounted tuition due to her own 'low' income level, thus far lower costs for state universities / community colleges.

    However if the girl is NOT a college student, the 51% support test does indeed apply from age 18.
    Last edited by Melonie; 08-19-2013 at 01:00 PM.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Quote Originally Posted by Melonie View Post
    Just to be technically correct, where college student status is concerned, the 51% support test for dependent status doesn't apply. The law ( IRS code, actually ) says that college students are by definition dependents of their parents until they reach age 24, get married, join the armed forces, or can otherwise prove to a judge that they are 100% capable of supporting themselves without ANY outside assistance, parental or otherwise.

    Thus a college student camgirl can be earning 90%+ of the money being used to support herself and pay for her college tuition, with the parents only providing say 10% via the occasional gift of a few extra bucks, and the girl will STILL wind up being classified as a dependent of her parents if she is under the age of 24. And even in the extreme case where the college student camgirl under age 24 is receiving no assistance whatsoever from her parents, and paying 100% of her own living expenses and college tuition, she will STILL wind up being classified as a dependent of her parents until she successfully petitions the family court for legal 'emancipation'.

    I am told that this situation is the end result of FAFSA and the IRS mutually deciding how the whole student grant money / tuition tax credits etc. mechanism needed to be implemented. Since student grant money amounts are based on 'total household income', being a dependent of the parents vs. being 'emancipated' means far less student grant money eligibility for the student ( since grant money calculations can be based on both the parents' income level PLUS the student's income level vs. just the student's income level ) thus far lower costs to the gov't !!! A similar situation applies where a dependent student may be required to pay 'full' tuition amounts based on her parents' income level, while an 'emancipated' student may be eligible for discounted tuition due to her own 'low' income level, thus far lower costs for state universities / community colleges.

    However if the girl is NOT a college student, the 51% support test does indeed apply from age 18.
    I was a full time college student when my mom claimed me on her taxes and when I also claimed myself. However, I was making more money than she was, so she could not claim me as a dependent. I called the IRS immediately when I got the letter that is what they told me.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    I was told by our accountant that the two are completely separate. You can be independent to the IRS and dependent to the Fafsa. Been filing this way for 4 years and collecting federal student grants with no issues.
    "People jack off with the left hand and point with the right."

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Quote Originally Posted by Selina M View Post
    I was told by our accountant that the two are completely separate. You can be independent to the IRS and dependent to the Fafsa. Been filing this way for 4 years and collecting federal student grants with no issues.
    That makes sense because FAFSA only really looks at age and total income (yours + your parents). Whereas the IRS is only looking to see if you are making more than your parents, and if you are, there's no way you can receive 51% or more of your support from them because that wouldn't be logical.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Quote Originally Posted by GlamourRouge View Post
    I was a full time college student when my mom claimed me on her taxes and when I also claimed myself. However, I was making more money than she was, so she could not claim me as a dependent. I called the IRS immediately when I got the letter that is what they told me.
    yup the dependent status only is for fafsa and financial aid. I was a full time student and supported myself and files taxes as an independent but when I completed my fafsa every year I had to mark dependent and include my parents income.

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    Default Re: 18 year old living at home who has NO idea about taxes- help please!

    Quote Originally Posted by Selina M View Post
    I was told by our accountant that the two are completely separate. You can be independent to the IRS and dependent to the Fafsa. Been filing this way for 4 years and collecting federal student grants with no issues.
    yeah thats correct.

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