My 21 year old daughter lives at home and is a full time student. She received an academic scholarship in 2018 for most of her expenses and we took the deduction for books, etc. on me and my wife's taxes as she is our dependent. We already filed for 2018.
The only income my daughter had in 2018 was a very small W-2 for substitute teaching (under $500) and a stipend she earned through the State for student teaching for high needs children. The conditions of the stipend were that the student must be enrolled in a college program and perform student teaching duties (traveling to local k-5 and special needs schools). The amount of this stipend was $4000 and she received a 1099-MISC with the income showing in Box 3.
When I tried to do her taxes this of course shows up as self employment income. I have walked through the other steps others had mentioned to show it as other income. It shows her as owing $310 for Federal and some for State. For some reason Turbo Tax is not taking this $4000 as part of her income which is used to figure her exemptions. Is this considered earned income to be used on this calculation? If so technically would she even have to file a tax return due to the dollar amount? If it is considered unearned then are the calculations above correct?
