Not really, but will look into it!

He doesn’t have to file, but there’s no harm in doing so because the cost is nothing more than a few minutes of time. It’s recommended that you file even if you don’t meet the minimum income because any potential government stimulus programs will use that filing information to distribute money. It’s good to have a filing record even if you don’t owe anything, and it’s a good opportunity to teach him how to file taxes.

Can you explain what you mean by “can you afford it overall”?

And yeah I’ll have to look into what would happen if I break early because I have some friends who are looking to move now, but I really do love this apartment so that’ll hurt.

And yeah- it was stupid lol

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I use my online bank for most of my banking needs. I can do pretty much the same thing with an online bank as with a brick and mortar bank, but without being nickeled and dimed on everything such as having minimum balance requirements, fees for checking, fees to externally transfer money, while also earning higher yield interest (eg. .01% at most major banks vs 3.5% or more with an online bank). Most online banks now no longer charge overdraft fees and may even provide free paper checks. The usual con with online banks is obviously the lack of physical branches. But depending on the online bank, you may still be able to deposit cash (eg. Discover, Alliant Credit Union and CapitalOne allow that) as well as wire money and get cashiers checks. However, I still keep an account at a local bank (luckily with no fees or minimum balances) for the rare instances where I need in branch service. For example, while I can deposit cash into my online account via ATM, I still prefer to do large cash deposits with a human teller just to avoid an issue of getting my money eaten. I also prefer a human teller when wiring money to avoid issues. Or most recently, requiring a medallion signature guarantee when opening a Treasury Direct account.

As for keeping money in these accounts versus investing, the advice on this sub is to only keep as much cash as you need. So basically this means keep any money you will need in a 5 year or less time frame in something safe and liquid like a high yield savings account, while investing the difference. The reason is that the market is volatile and you do not want to be in a situation where you need the money now but due to a market dip, you now have less than when you started. Based on past historical market crashes, it's taken around 4+ years for stock prices to return thus the 5 year rule.

As for safe liquid savings, those don't necessarily have to be in high yield savings, but HYS is the most liquid. If you want to min/max your cash savings and don't mind the extra friction to access it, you can earn more interest by buying T-Bills, CDs and iBonds or signing up for new account bonuses. I typically layer my cash savings. Emergency funds stay in HYS or Money Market funds since they can be access/liquidated immediately. iBonds older than 12 months are also very liquid, but you lose the last 3 months of interest if cashed out before 5 years and are completely unavailable for the first 12 months. New account bonuses, CDs and T-bills bought through a brokerage can be accessed sooner their their mature date but usually involve losing your interest if accessed sooner.

God no, if they’re in deferment. Wait and see what happens first, save the cash now and then make payments once they start. Why spend money now if nobody’s asking for it, it’s not accruing interest, and there’s no penalty for not paying?

Edit to add that I am but a layperson with one student loan left in deferment and this is my approach. Ymmv

You're missing an important detail in the original post. His company closed and the plan was likely terminated.

So I do this once every 15-18 months with a new card. I have been carrying about 25k at 0 interest for 15 years. In the end, I spend $0 on interest and cc companies pay me to use their card (for this, I usually get like a $200 bonus plus the $400 on purchases- always get those rewards. Add to my regular rewards, I make about $1500/yr). Plus, the balance actually seems to help my credit score (still low overall percentage of cc “use” so holding the balance doesn’t hurt)

The secret is not to use the balance transfer…unless no fees but that’s rare now. So get the new card a few months before the old one and use it for every possible purchase. You use it until it’s maxed, cash your rewards, the money you would have normally used goes to pay your expenses pays off the old card(s). Then you just pay the min as long as interest is zero. Rinse and repeat.

Simply find the best rewards and longest 0% on the credit card compare site. I don’t even need to carry a balance, but it’s not hard to manage and I’d take out as many loans as possible at 0%. Not many options tho!

Thanks for the advice. I will tell all my kids and my sister where everything is and give them all the combination.

401K accts often come with an employer match that makes it worth doing as long as you can pay the minimums on your cc. Also, if you are still employed, you can often take out a loan from the 401K balance. Doesn't help OP now, but those are reasons people do 401K and have cc debt.

He was an actor for a summer theater group - that's where the $3K came from. They sent the 1099 NEC, which I guess means he has to claim it as self employed income? I'd never seen one of those forms before, which is why I'm confused.

I'll find a local tax person to help me - I thought this was something I could figure out online, but as it's a new area to me (taxes are just NOT my expertise) I'll consult someone to make sure it's done right.

Thanks for all the quick responses -- this is helpful.

Her would owe at least the payroll taxes (SS and Medicare) since he made more then $400 he has a filing requirement

Thank you kind friend!

his work study job at college and about $2K he made working at Walmart.

If you keep them in a safe or lockbox make sure your executor and at least 2 other people know where the combination and keys are. Make duplicate keys and spread them around to different people.

My ex forgot the combination to his gun safe and it was just a fluke that someone else had written it down.

Right back at you on most of the posts here! :) I always am relieved when you and DeluxeXL concur with my advice and I haven't completely butchered my understanding of taxes.

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Man you guys are quick

1099-NEC is for a contractor, I.e. self employment.

If he has more than $400 in net self employment income he has a filing requirement.

Whether he should have been an employer is another issue.

Was that his only income? Where’s the other $5k from?

That's a self-employment income. The threshold to file when SE income is present is $400.

How much unearned income was there? Your son may be subject to kiddie tax on unearned income.

https://www.irs.gov/taxtopics/tc553

1099-NEC means he was self employed, and thus owes payroll taxes (i.e. social security & medicare) on his earnings. That's separate from income taxes, which he owes nothing.

File and pay the tax, otherwise the IRS will be sending a letter sometime in the next 12 months asking for their share, plus interest.

He worked for a nonprofit organization last summer, who paid him $3K, but did not withhold anything. That's the only thing I can figure out why it was showing he'd owe something? They sent him a 1099-NEC (I think is the form? I'm at work currently and left the information at home)

If your son only had employment income, no business (including self-employment) income, no interest/dividend/capital gain/invesment income, and the total income was less than $12,950, he doesn't have to file unless he wants to get the tax withholding refunded back.

However, if he owes money, the above cannot also be true. One of the above must be false.