How to file taxes as a teen independent contractor? (Self-employed, first time, US)

Don't panic! This is a totally manageable situation, especially for someone your age who's being proactive. First, let's clarify some basics - as an independent contractor, you're considered self-employed. You filled out a W-9 form (not a W-2) when you started, and you'll likely receive a 1099-NEC form from your client in January showing how much they paid you in 2024. For the quarterly estimated taxes: Yes, self-employed individuals typically need to make quarterly payments if they expect to owe $1,000+ in taxes. Missing the September deadline isn't ideal, but it's not the end of the world. You'll likely have a small penalty for late payment, but it's usually just a percentage of what you owed. About the Schedule SE - yes, you'll need this to calculate self-employment tax (which covers Social Security and Medicare). The "net farm profit" line is confusing because the form is used for different types of self-employment. For your graphic design work, you'll be using your net earnings from self-employment, which is basically your income minus expenses. Since you're under 18, I'd recommend having a parent or guardian help you set up an Electronic Federal Tax Payment System (EFTPS) account to make payments online, or you can mail payments with Form 1040-ES.

I was in almost the exact same situation last year and found taxr.ai (https://taxr.ai) super helpful for sorting through all my tax obligations as a young contractor. Their system analyzed my income and expenses and gave me a complete breakdown of what I needed to file, what I could deduct, and how to handle those quarterly payments. The part that really saved me was their explanation of self-employment taxes - they showed exactly how much I needed to set aside from each payment (about 30% for federal, state, and SE tax combined). They also explained how the Schedule SE works with the Schedule C for reporting business income. Definitely worth checking out if you're confused about the forms.

Just wanted to update - I tried taxr.ai and it was actually really helpful! I uploaded my payment records and it immediately showed me that I only needed to worry about quarterly payments because I'm going to earn over $15,000 this year. Otherwise I could have just paid at tax time. They explained the whole Schedule C and Schedule SE connection that was confusing me, and showed which business expenses I could legitimately deduct. My photography equipment and editing software subscriptions are saving me a bunch on my tax bill! Plus they have templates for tracking mileage and other expenses that make everything way easier to document.

If you need to actually talk to someone at the IRS about your situation (which might be smart considering you missed a payment), I'd recommend Claimyr (https://claimyr.com). I wasted HOURS on hold with the IRS before discovering this service. You can see how it works here: https://youtu.be/_kiP6q8DX5c Basically, they call the IRS for you and wait through that ridiculous hold time, then call you once they have an actual human agent on the line. I used it when I had missed a quarterly payment too and needed to understand the penalties. The IRS agent was surprisingly helpful in explaining my options and setting up a payment plan.

I was completely skeptical about Claimyr but I gave it a shot today and...wow. I had been trying to get through to the IRS for THREE DAYS about my missed quarterly payment. With Claimyr, I got a call back in about 50 minutes and was connected to an actual IRS person! The agent explained that I could still make my missed payment now and file a Form 2210 with my tax return to explain the situation. She said because I'm young and this is my first time filing self-employment taxes, I might qualify for first-time penalty abatement. I never would have known that without actually talking to someone. Seriously worth it just to avoid the hold music torture.

Make sure you're tracking all your business expenses! I didn't realize how many things qualified when I first started freelancing. Some expenses you can probably deduct: - Portion of internet bill - Software subscriptions for design work - Computer hardware (depreciated) - Online courses to improve your skills - Office supplies - Any fees from payment processors Keep all receipts and track everything in a spreadsheet. This will lower your taxable income quite a bit.

Big heads up for you: at 16, you might not have to pay self-employment tax at all if this is considered a dependent's unearned income! The rules are different if your parents claim you as a dependent, which I'm guessing they do. You should really have your parents talk to a tax professional about this because it gets complicated with minor's taxes.

Hey Chloe! I totally get the stress - I was in a similar boat when I started freelancing at 17. Here's what helped me get organized: First, don't panic about missing the September deadline. The penalty for late quarterly payments isn't huge, especially on a first-time basis. Calculate what you owe for Q3 and pay it ASAP along with your Q4 payment due January 15th. For record-keeping, I'd suggest setting up a simple system now: - Open a separate checking account for business income/expenses if possible - Track all business expenses in a spreadsheet (internet %, laptop use, software, etc.) - Set aside 25-30% of each payment for taxes The Schedule SE form is definitely confusing - ignore the farm stuff, that doesn't apply to you. You'll report your net profit from Schedule C (income minus expenses) on the SE form to calculate self-employment tax. Since you can't create an IRS account yet, have a parent help you set up online payments or mail estimated tax payments with Form 1040ES. You're actually ahead of many people by catching this now instead of at tax time! Consider getting help from a tax pro for your first filing - it's worth the peace of mind and you'll learn the process for next year.