There's quite a bit here. So take your time and soak it in.
Since more than $400 of self-employment income was earned, your teen will report it on her own tax return. She will not pay "regular" tax on the business earnings, provided her total earnings for the tax year was under $6300. But she will pay the Self-Employment tax. That's basically the employer side of Medicare & Social Security. So no way out of that.
A 1099-MISC is not required or necessary. When the program asks if she has income reported on a 1099-MISC, just say NO and press on. Then she'll enter all self-employment income not reported on a 1099-MISC and go from there.
For the online version of the program, she'll need the Self-Employed version. She "might" get away with the premier online version if she claims no business expenses what-so-ever. But she "must" select the option for "independent contractor". That will qualify her for the SCH C-EZ Business Income & Expenses, and she won't need to file the full SCH C which is only available in the SE online version.
Your daughter is required by federal law to provide the client with either her SSN or EIN (Employer Identification Number), as the client needs that in order to claim the childcare expense deduction on their return. However, I personally have a problem with giving anybody my SSN for any reason. So I suggest your daughter obtain an EIN and provide that to the client.
The EIN can be obtained online for free and takes about 10 minutes. Get it at https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-n...
The EIN to a business, is like an SSN to an individual. So protect that number the same as you would your SSN. The EIN is issued by the IRS, and is for tax use only. When applying, you will be tying that EIN to a specific SSN. So make sure you tie it to your daughter's SSN, and not yours. (Otherwise, you'll have issues down the road with the IRS).
Once obtained, your daughter will use the EIN in the business section of the program only. She still uses her SSN in the Personal Info section. Also, she needs to provide this EIN to those who paid her. They need it for their own tax return to get the childcare tax credit.
When the babysitter does her own tax return, she must select the option for "I can be claimed on someone else's return". Otherwise, that babysitter's parent can't claim them as a dependent on their tax return.
