Urgent: Please help me w/tax question

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usrael

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Hey guys,

My 2007 income consisted of 1) <400$ in interest made from my loans
2) 3,000$ I made from a Summer research project at my school's hospital. I received a 1099-MISC form.

Do I need to file?
The IRS site has a helpful "do i need to file taxes" corner. I'm just confused as to whether I'm considered "Self-employed" or not. If i am, I would need to file because my income was>600$.

thanks so much for your help.

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Hey guys,

My 2007 income consisted of 1) <400$ in interest made from my loans
2) 3,000$ I made from a Summer research project at my school's hospital. I received a 1099-MISC form.

Do I need to file?
The IRS site has a helpful "do i need to file taxes" corner. I'm just confused as to whether I'm considered "Self-employed" or not. If i am, I would need to file because my income was>600$.

thanks so much for your help.

I dont think you need to file, but you should file because you will be eligible for the earned income credit, which will pay you for not making much money.
 
Hey guys,

My 2007 income consisted of 1) <400$ in interest made from my loans
2) 3,000$ I made from a Summer research project at my school's hospital. I received a 1099-MISC form.

Do I need to file?
The IRS site has a helpful "do i need to file taxes" corner. I'm just confused as to whether I'm considered "Self-employed" or not. If i am, I would need to file because my income was>600$.

thanks so much for your help.

You're not self employed and yes you should file taxes.

Your first income point doesn't make much sense. You made <$400 in interest from money you loaned to someone else??? Did you mean to say you accrued/(paid?) $400 in interest from money you borrowed. If so, then this isn't considered income.
 
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You're not self employed and yes you should file taxes.

Your first income point doesn't make much sense. You made <$400 in interest from money you loaned to someone else??? Did you mean to say you accrued/(paid?) $400 in interest from money you borrowed. If so, then this isn't considered income.


I made <400$ from the interest I accrued on my student loans....
Thanks for the advice. I wish I knew about the earned income tax credit.
If only I could file retroactively for all the years of college :)
I plugged in the numbers and I should get ~250$ back.
 
You should always file if you want your money back. Anyway, I'm not really understanding your first statement. Did you invest your student loan money or what? Next year don't take out as much money as $400 you made must have been a pretty nice chunk of change. Assuming you found some safe investment that gave you a 6.8% matching return (let us know!) you would have had to invest nearly 6000 extra loan money after tuition and all of your expenses. Depending on your tax situation with the summer research and other things it doesn't make much sense.

Of course a 6.8% return over a single year (this past one) seems a little optimistic in some cases so please explain.

Either way, budget your loan money and only take out the amount you need with perhaps a little bit extra.
 
You should always file if you want your money back. Anyway, I'm not really understanding your first statement. Did you invest your student loan money or what? Next year don't take out as much money as $400 you made must have been a pretty nice chunk of change. Assuming you found some safe investment that gave you a 6.8% matching return (let us know!) you would have had to invest nearly 6000 extra loan money after tuition and all of your expenses. Depending on your tax situation with the summer research and other things it doesn't make much sense.

Of course a 6.8% return over a single year (this past one) seems a little optimistic in some cases so please explain.

Either way, budget your loan money and only take out the amount you need with perhaps a little bit extra.

I'm not sure why you're surprised. I typically have 6-10k of extra loan money to use towards rent and personal expenses. By the end of the year it's all chewed up, but as it dwindles down it makes a solid return. It's not 6.8%...it's the ING/Citibank rate (this year 4.5---> 3.4).
 
My question to you is how the income was reported on the 1099-Misc.

If it was reported in Box 7 as non-employee compensation, you will end up owing "self-employment taxes" on that income at a rate of 15.3%. Self-employment taxes are the social security taxes paid by independent contractors. And income reported in Box 7 denotes that you are an independent contractor. In this case, you DEFINITELY need to file, since you are stuck paying self-employment taxes once that type income exceeds $400, and the IRS will be looking for your paperwork based on the 1099 they received.

If the income is reported in Box 3, then that shows that you got a fellowship or a stipend, and that is not subject to self-employment taxes. Whether you'll need to file depends on other variables, such as if you will be claimed as a depedent on your parent's tax return.

Finally, don't forget that you only qualify for the 2008 Tax Rebate if you file your tax returns, even if you have no taxes due.
 
My question to you is how the income was reported on the 1099-Misc.

If it was reported in Box 7 as non-employee compensation, you will end up owing "self-employment taxes" on that income at a rate of 15.3%. Self-employment taxes are the social security taxes paid by independent contractors. And income reported in Box 7 denotes that you are an independent contractor. In this case, you DEFINITELY need to file, since you are stuck paying self-employment taxes once that type income exceeds $400, and the IRS will be looking for your paperwork based on the 1099 they received.

If the income is reported in Box 3, then that shows that you got a fellowship or a stipend, and that is not subject to self-employment taxes. Whether you'll need to file depends on other variables, such as if you will be claimed as a depedent on your parent's tax return.

Finally, don't forget that you only qualify for the 2008 Tax Rebate if you file your tax returns, even if you have no taxes due.



Thank you Andy. After reading up on the topic I agree with your assessment.
I went ahead and filed. The advantages of being self-employed are the deductions they allow for transportation, food, etc... I managed to minimize my payout to <100$. I still can't believe that I actually needed to pay the government. (and that's after receiving credit).

thanks again
 
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