Child's Youtube income on my 1099-MISC

[lauactuary]

My 16 year old made more than  $400 in youtube channel.  The AdSense account is under my name and social because you have to be 18 so the 1099 was sent to me, with an amount on Box 2, Royalties. When I input the 1099-MISC in turbotax it asks me whether it was investment income or royalties, and when I choose royalties it directs me to the self employed section.  I don't want to fill the self employed section, what I want to do is cirvunvent this, since I'm going to put the same negative amount in Less common Income, under Other reportable income, with Chile Income Pub 929 as description, so that it cancels out. In this way my child can file his own income return for this self employment. How can I input 1099-Misc Box 2 without being redirected to self employment section? Could I put it as Box 3? It is not going to match what AdSense will report to the IRS though... 

Also, when my child reports his sef employment, does he has to refer to 1099-MISC since it is not on his name or does he has to report it as other income with no associated form?

[cqpkyo]

check out: https://ttlc.intuit.com/community/business-taxes/discussion/childs-youtube-income/00/2410658

good luck!

[PatriciaV]

Yes, you should report this under Other Common Income as a 1099-NEC (for ease of entry) using a description that includes "Dependent Child." On the page "Does one of these uncommon situations apply?", check the box for "This is not money earned as an employee..."

Now go to Less Common Income >> Miscellaneous Income >> Other reportable Income. A good description might be "Dependent Income Pub 929" (to reference the IRS publication that applies). Enter the same amount as shown on Form 1099-MISC, but as a negative number. 

These two steps will report the income on your Schedule 1 Line 8j and the offset on Line 8z. Note that Schedule 1 has no designated lines for "1099-MISC" or "1099-NEC." This is because the IRS doesn't track these forms as much as the dollar amount. As long as you report the income, you have satisfied the IRS.

Your child would enter this on his return under Schedule C Self-Employment, along with any related expenses. Since the 1099 was not issued to his SSN, he should enter this as other business income, not on the 1099 page.

[eedw9]

Does it have to be reported on Schedule C?  Could it be reported as "Hobby Income", especially if the child is a full time high school student and just does this on the side?

[AmeliesUncle]

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@eedw9 wrote:

Does it have to be reported on Schedule C?  Could it be reported as "Hobby Income", especially if the child is a full time high school student and just does this on the side?

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Generally, if it is an ongoing activity with the intent to make a profit, it would be a business on Schedule C.  However, you should look at the "nine factors" to decide if it is a business or if it is a hobby.

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax...

https://www.journalofaccountancy.com/issues/2013/oct/20138370.html

[eedw9]

Also, if the income is less than $13,850, does he even need to file?

[VolvoGirl]

Yes he has to file.  It is self employment income and he pays self employment tax on $400 or more even if there is no regular income tax on it.