Question:

Do paperboy's have to pay income tax?

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My son just got a job as a paperboy. I was wondering if he has to pay income tax. The paper said that with the "Little Merchant Tax Law" that this is untaxable income and he doesn't have to pay tax. I googled it and have searched but I can't find any reference to this law or if my son does have to pay taxes on his paper route. Can somebody verify or unverify this for me? I don't want to get in trouble or get him in trouble over something so stupid. A link to the actual copy of the law so I can print it out would be great.... Thanks!

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  1. If he is an employee, then taxes will be withheld from his pay and he should file a return, whether he is required to do so,  because he may get a partial refund.

    If he is an independent contractor and makes over $400, then a full 1040 return (not 1040A or 1040EZ) and a Schedule SE and either a Schedule C or a Schedule C-EZ must be filed and self-employment tax will definitely be due (income tax may or may not also be due).


  2. Most paperboys are independent contractors.  If he makes more than $400, he would be liable for self-employment tax for social security and medicare.  If he makes more than $600, he will recieve a 1099 form from the newspaper company.

    On the off-chance that he would be considered an employee, the employer will make the deductions.

  3. http://www.irs.gov/publications/p929/ar0...

    I'm not sure if that's what you want but it may lead you to the right place.

  4. Your son will probably not have to "pay" any income tax but just to be on the safe side your son should file an income tax form.  My kids have never had to pay any income taxes but they have always filed, and they generally get a refund of any income taxes that have been withheld.

  5. If he makes enough from his route to owe income tax, then yes he has to pay it - for 2008 that limit is $5450.  But there's also the issue of self employment tax - for that see http://www.irs.gov/faqs/faq-kw163.html

  6. Did he make more than $3000 this last year?   I dont think you have to file if under that amount.
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