My son is 22 and a full time college student. He did a one time job for his college this year, for which he received a 1099-NEC form for $2000. This is his ONLY income (no interests, no other job, etc). He does NOT have a business. We claim him as a dependent in our tax forms (he has not needed to file taxes yet).
I understand and agree with the fact that he must pay self-employment taxes.I just want to make sure we are all doing the right thing.
QUESTION 1: Is he actually required to file taxes on $2000? I am finding contradictory info on whether he should:
Info A (from IRS table 2 filing requirements for dependents): dependents must file if gross income (earned + unearned) is larger than: $1300 OR larger than earned income +450. That would be $2450. Since he earned a total of $2000, he would NOT have to file.
Info B (IRS table 3 Other situations when you must file): must file if net earnings from self-employment are more than $400. He is not self-employed, but his earnings were $2000. He would HAVE to file. Which is correct?
QUESTION 2: Assuming he has to file taxes and pay self-employment taxes (again, this is not the question)....would he have to open a business, get a business code, etc just to do his taxes this year? Next year, he might get a 1099-NEC for a completely different thing (or not) and he would then have to open up another business potentially with a different code. Is this correct? Does not make much sense to me....
QUESTION 3: Is it at all possible that his 1099-NEC is included on our own return?
QUESTION 4: If he has to file his own taxes, he is still financially dependent on us. We will be claiming him as a dependent (though we have no deduction for claiming him) . And he should state that he can be claimed as a dependent as well. Would this be the correct way to do things?
Tahnk you in advance
