Do I have to file taxes if I make 10k as an individual contractor? College student question

Wait, so even if I'm a student I still have to pay the full self-employment tax? I heard there was some kind of student exemption or something. Also, what counts as "business expenses" for dog walking? Like can I deduct the cost of treats I buy for the dogs or like the gas I use to drive to their houses?

There is no special self-employment tax exemption for students - if you earn $400+ in self-employment income, you're required to pay the full 15.3% SE tax regardless of student status. That's a common misconception. For business expenses, you can definitely deduct mileage for driving to clients' homes (use the standard mileage rate or actual car expenses), dog treats, leashes, waste bags, and any other supplies directly related to your dog walking service. You might also deduct a portion of your cell phone bill if you use it to communicate with clients, apps for scheduling or tracking walks, and even business liability insurance if you get it. Just make sure to keep detailed records and receipts for everything you plan to deduct.

Does that service help you figure out quarterly estimated payments too? I heard somewhere that contractors have to pay taxes throughout the year and not just at tax time. Is that true even for smaller amounts like 10k?

I've been hearing about these AI tax services but like, how accurate are they really? No offense but I'd be nervous about trusting a computer with my tax situation when the penalties for getting it wrong can be so serious. Did you have any issues with the IRS after using it?

Yes, it absolutely helps with quarterly estimated payments! It calculates what you should be paying each quarter based on your income projections. Even with smaller amounts like 10k, you're technically supposed to make quarterly payments if you'll owe more than $1,000 in taxes at filing time - which is pretty likely with self-employment income. I had the same concerns about accuracy at first, but the service actually explains the reasoning behind each calculation and references specific tax code. I compared some of the results with what my friend's accountant did for him, and they were essentially identical. The IRS accepted my return without any issues, and I even got a small refund because the service found some deductions I had no idea I qualified for.

How does this service actually work? Like are they just calling for you or what? Seems weird that they can get through when nobody else can.

This feels like a scam tbh. If the IRS phone lines are backed up, how could some random service magically get you to the front of the line? Did you actually talk to a real IRS agent or just someone pretending to be one?

They use some kind of technology that navigates the IRS phone system and waits on hold for you. When an agent finally picks up, you get a call connecting you directly to that agent. It's not cutting in line - they're just handling the hold time for you. Yes, it was definitely a real IRS agent. They verified my identity using the standard IRS verification questions, and the call came through the official IRS phone system. The agent was able to access my previous tax records and everything. It's just a service that handles the frustrating hold time - once connected, it's a normal IRS call that you handle yourself.

Thanks for mentioning this about being a dependent! So if my parents claim me, does that mean I'll end up owing more in taxes than if I filed independently? And what kind of things should I be tracking in this spreadsheet? Just dates, clients, and amounts or is there more I should be writing down?

Being claimed as a dependent could result in owing more taxes in some situations because your standard deduction might be lower than if you filed independently. However, there are other benefits your parents get from claiming you that might outweigh this difference for your family overall. For your spreadsheet, track way more than just the basics! Record dates, client names, payment amounts, payment methods, mileage to/from each client (with starting/ending odometer readings ideally), any supplies purchased (treats, bags, etc.), apps or software you use for the business, a portion of your phone bill if you use it for client communication, any insurance you get, and even home office expenses if you use part of your living space exclusively for business administration. Basically, document EVERYTHING with receipts. Tax time will be so much easier, and you'll maximize your deductions which directly reduces your taxable income.

This is a really good point. I'm in NYC and got completely blindsided by having to pay city tax on top of state and federal. It was an extra 3.8% I wasn't expecting!