Since the bonus was related to her employment, it probably should be reported as self-employment income and reported on Schedule C. It does not matter what company he paid her from, the income is still related to her employment so should be considered self-employment. TurboTax wants her 'business' info to set up the Schedule C. You should enter her name and her home address as the business name and address and use her information for the Schedule C. This should not take long and is the correct way to report it. She is subject to self-employment taxes this way but can also deduct expenses against this income. If the income is reported in Box 7 (non-employee compensation) of a 1099-MISC, the IRS will see this as self-employment income, meaning your daughter is self-employed for tax purposes.
You have the option to report the income as ''Other Income'' however, please note that if you report it this way, you may receive an IRS inquiry and have to pay interest and penalties for not reporting the income properly.
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