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  1. #1
    SitePoint Enthusiast Bare Koncept's Avatar
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    1099 for dependant?

    I'm just throwing arround some legal terms here, but hopefully someone can understand me well enough to answer my question:

    Legally, I am still a dependent(?) of my parents (need to be 18?) but have been accepting payments now for a year and a half, many of which *might have been* in excess of $600. Wanting to do things legally, I'm wondering what my obligations are in filing a 1099. I guess my question is, since I'm "underage", do I do things differently? I don't do any taxes, don't know how; how do I start?

    Thanks for any help.

  2. #2
    SitePoint Wizard cmuench's Avatar
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    I will ask my dad tomorrow. He is an attorney and also a CPA, CFP. He will know in about 15 seconds what to do.

  3. #3
    SitePoint Wizard Lil_Red's Avatar
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    Your parents need to report your income on their taxes. If they are not reporting the income you earn, they could be responsible for paying huge fines to the IRS.

  4. #4
    Non-Member demosfen's Avatar
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    You are liable for taxes, assuming you have a Social Security Number. Having SSN is what makes you liable. (In fact my daughter doesn't have SSN and my accountant says I can't even claim her as a dependant for tax purposes) If I were you, I would consider cancelling your SSN for now, so that your parents can't claim you on their tax forms. You won't be eligible for driver license for a few more years anyway, and almost everything else can be done without SSN (bank account, credit cards etc.). The only thing I am not sure about is how you receive payments? Say, if it's a Paypal or Adwords account under your parents' name, obviously it won't work
    This is not a legal advice and I don't know all your circumstances, etc. You or your parents would need to do your own DD
    P.S. Another downside would be that income you don't report doesn't count towards your SS payments, but I don't think it matters because this ponzi scam is scheduled to go bankrupt long before you retire.

  5. #5
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    What kind of advice is that... cancelling a social security number? You can't just throw away your US citizenship like that.

    If you get a 1099 from a company, pay your own taxes on the income. It takes all of 10 minutes to do it yourself with a copy of TaxBooks software you can get free from Staples around tax time (they have free-after-rebate deals every year).

    A 1099 is not something you file, it's something the person paying you files. But once they do, the IRS knows you have earned income, so you can't pretend you haven't anymore. Not paying taxes would be a federal crime.

    Being a dependent doesn't change any of this. You can be claimed as a dependent by others and still pay your own taxes (as you may all through college if your parents are still supporting you financially).

  6. #6
    Non-Member demosfen's Avatar
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    Quote Originally Posted by Dan Grossman
    What kind of advice is that... cancelling a social security number? You can't just throw away your US citizenship like that.
    What does SSN have to do with US citizenship?

    Being a dependent doesn't change any of this. You can be claimed as a dependent by others
    According to my accountant you can't - I didn't look into it myself though. But I think it makes sense - you are forfeiting your right for SS payments, welfare, etc. , so why would IRS care about your income.

    If you are not liable for tax, I don't see how it matters whether IRS knows you made money or not? We are not trying to avoid paying taxes owed here, or anything.

  7. #7
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    Your accountant is wrong. The first question TaxBooks asks you is "have you been claimed as a dependent by someone else?" The only thing it changes about your obligations or your tax return is that you can't claim yourself if someone else is claiming you. You still must pay taxes on your earned income. Heck, you have to pay more taxes since you have less exemptions on your own return.

    IRS definition of a dependent

    If you are not liable for tax, I don't see how it matters whether IRS knows you made money or not?
    Being claimed as a dependent doesn't make you not liable for paying taxes, so the fact that the IRS knows you made money and you don't file a tax return means you're going to end up fined or in jail.

  8. #8
    SitePoint Enthusiast Bare Koncept's Avatar
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    OK, thanks. I'll just whip out taxbooks

  9. #9
    Non-Member demosfen's Avatar
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    Based on what statute? If you are right then I would have to sue my account for malpractice and redo my income tax, because I would end up paying lower tax. But the thing is that the law says that you are not liable for taxes unless you have a SSN. I don't have it on hand, will look it up later if you want

  10. #10
    Non-Member demosfen's Avatar
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    Here you go - Constitution, article 1, section 9(4) - bans the government from collecting direct taxes (which income tax is). There is an amendment that allows collecting direct taxes if the person has SSN, I don't remember which one and am too lazy to search for it now. Think about it, what sense would it make if the government collected income tax from people who forfeit medicare, welfare, etc.? And what would they spend the money on, short of forcing you to accept welfare?
    (This is not a legal advice, if anyone follows it and it's wrong (which I don't think it is) you will be the one to have legal problems)

  11. #11
    SitePoint Wizard Lil_Red's Avatar
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    Quote Originally Posted by demosfen
    You are liable for taxes, assuming you have a Social Security Number. Having SSN is what makes you liable. (In fact my daughter doesn't have SSN and my accountant says I can't even claim her as a dependant for tax purposes) If I were you, I would consider cancelling your SSN for now, so that your parents can't claim you on their tax forms. You won't be eligible for driver license for a few more years anyway, and almost everything else can be done without SSN (bank account, credit cards etc.). The only thing I am not sure about is how you receive payments? Say, if it's a Paypal or Adwords account under your parents' name, obviously it won't work
    This is not a legal advice and I don't know all your circumstances, etc. You or your parents would need to do your own DD

    You always give the most ridiculous advice. FYI - you can't cancel a SSN.

    http://ssa-custhelp.ssa.gov/cgi-bin/...i=&p_topview=1

  12. #12
    Non-Member demosfen's Avatar
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    Off Topic:

    Practicing the law without license is illegal in the US, or in any country that has laws for that matter. Because of that, I don't give a legal advice, ridiculous or otherwise. I only express my opinion. Besides, it's against SITEPOINT GUIDELINES to give advice that is thought illegal. I really wouldn't want to go into trouble of PM'ing mods every time I post my opinion to find out if they think this or that is illegal.
    Let's discuss taxes and dependents rather than my personality. Driving threads off-topic is a violation of SITEPOINT GUIDELINES

    SSA may not provide a form for cancelling your SSN, but it doesn't exclude them from obeying contract law (which SSN is - a contract). You would have to send them affidavit rescinding your signiture on SS application and stop using your SSN after that. We are off-topic by now, so if you want more details you can PM me, I think I have some pdf's on this

  13. #13
    Non-Member demosfen's Avatar
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    Since it's obviously giving you guys indigestion, I'll stop replying to this thread and anyone interested may PM me if needed

  14. #14
    He's No Good To Me Dead silver trophybronze trophy stymiee's Avatar
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    I'm going ask that advice which encourages members to do something illegal be kept out of this thread. Thank you.

  15. #15
    SitePoint Addict soccerfriend's Avatar
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    you definitely have to pay your taxes based on the amount income you have got it does not metter if you are anubody's dependent..
    TaxForum.us Have questions about US tax law?
    SoccerLinks.org - submit your soccer link free

  16. #16
    Non-Member demosfen's Avatar
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    Sorry for bringing up old thread, but here is what I found -

    http://www.apfn.org/apfn/ssn.htm

    Recently, the following letter was sent by the IRS to a family claiming their children on their tax return without supplying their social security number:

    "Dear Taxpayer:
    "This letter is your legal notice that we have disallowed your claim(s). We can't allow your claim(s) for refund or credit for the period(s) shown above for the reason(s) listed below.
    "PER SECTION 151(e) STATES THAT EACH DEPENDENT MUST HAVE AN IDENTIFICATION NUMBER IF THEY ARE BEING CLAIMED AS A DEPENDENT ON THE TAX RETURN. SECTION
    152(e) HAS BEEN CORRECTLY APPLIED.

  17. #17
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    Proving that his parents can't get deductions for him if he doesn't have an SSN does not prove that he doesn't have to pay taxes on his income.

  18. #18
    SitePoint Wizard Lil_Red's Avatar
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    Ditto to what Dan Grossman said.

  19. #19
    Non-Member demosfen's Avatar
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    Quote Originally Posted by Dan Grossman
    Proving that his parents can't get deductions for him if he doesn't have an SSN does not prove that he doesn't have to pay taxes on his income.
    <snip>
    Last edited by stymiee; Aug 15, 2006 at 19:04.

  20. #20
    He's No Good To Me Dead silver trophybronze trophy stymiee's Avatar
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    Sorry. Too much advocating of illegal activities for my liking. Thread closed.


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