You can still claim your daughter as your dependent if she is under 19 (or under 24, and a full-time student) and she didn't provide more than half of her own support.
She has to file her own tax return as she has self-employed income over $400. She has to indicate on your tax return that she can be claimed as a dependent by another taxpayer.
The following advice is for your daughter.
Income reported in box 1 of form 1099-NEC is self-employed income. You are considered as self-employed and in IRS terms, are operating a business doing what you do to earn the income reported on the form 1099-NEC. You enter your form 1099-NEC in TurboTax and TurboTax will populate a Schedule C after you enter all your information. You can deduct any expenses you paid related to this activity (such as supplies, car expenses, etc.)
Deductible expenses can be tennis equipment and clothing necessary for your work, lessons taken to maintain or improve your skills, vehicle expenses or mileage. Note that commuting mileage can't be claimed.
Self-employed income is subject to income tax AND self-employment tax (calculated at 15.3% on 92.35% of net self-employed income).
You don't own a business in the common meaning of the word. So in TurboTax answer that you use the cash method, that you don't have an EIN. You use your own name as the business name and your personal address as the business address. You can use 999999 as your business code.
You’ll need to use TurboTax Deluxe (or TurboTax Online Premium if you have expenses to deduct), or any version of TurboTax CD/Download.
You can read this TurboTax article for more information.
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