May 10, 2016 in Taxes

Widow on Social Security who earns $6,000 as a writer wants to know if she must file a tax return

Dear Tax Talk,

I am a widow, 83 years old. My only income is my Social Security. This year I earned $6,000 as a writer. Do I need to file a return?

— Barbara

Dear Barbara,

The answer to your question depends on how the $6,000 in income was reported to you. The general rule is that if your filing status is single and you were 65 or older at the end of 2015, then you are required to file a return if your gross income was at least $10,300.

However, the general rule may not apply to you, as there are several factors that apply in your specific situation. If you were “self-employed” and the “net income” as a writer was at least $400, then you will need to file Form 1040 and report your income and expenses on Schedule C, Profit or Loss from Business (Sole Proprietorship). The term “net income” refers to your gross income of $6,000, minus any deductible business expenses you may have.

A sampling of deductible business expenses

  • Advertising
  • Car and truck expenses
  • Office expenses
  • Supplies
  • Travel meals and entertainment

Alternatively, if you received a Form W-2 as an employee, you will need to file a tax return if you had federal taxes withheld and need to claim a tax refund.

If you are required to use Form 1040 Schedule C because your net earnings are more than $400, be sure to take a look at the form itself and the instructions to see what types of business expenses may be deductible to you. Among the many deductions listed, if you work from home you may be qualified to deduct home office expenses.

Additionally, please keep in mind that you will need to complete Schedule SE, Self-Employment Tax, to calculate the amount of tax owed.

I hope you enjoy your writing and wish you continued success with it. Thank you for the great question and all the best to you.

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