She does NOT (probably) need to file a tax return. Unfortunately the tax system is ridiculously complicated. Hence, the "probably".
It’s unclear what the source of her income is. That is, what does “$500 from selling art book” mean? Several Copies of her art book?
Generally speaking, selling stuff on the internet
means you are self employed and subject to self employment (social security and
medicare) tax (SET), as well as income tax. However, if this a one time deal, she may
report the income as other income, and avoid SET. Since her "other income" is less than $1050, she will not need to file a return. Even if it is self employment, if her
expenses reduce the net income to less than $400, she will owe no tax and does
not need to file a tax return. To complicate things further, the sale may actually be the sale of a capital asset (e.g. a valuable book), resulting in reporting the income as a capital gain. But again, the amount is below the filing threshold ($1050), so she still does not need to file a tax return.
If she does file a tax return, she uses her Social security number not the Texas ID #. That Texas # is for sales tax reporting.
The donation is essentially not relevant, for taxes. It does not reduce the amount of tax she has to pay. Charitable donations are only an itemized deduction. Since her standard deduction is bigger than the amount of her donation; she gets no additional tax benefit from making a donation. She cannot deduct the charitable donation as a “business expense”
