My 16 year old daughter received a 1099-NEC for working at a horse stable. No taxes were withheld. She made around $3854. I've entered all job related expenses. Is it true that she owes $544 to the federal government? IF so, why as she is a student? This form is new to me.
MY DEPENDENT HAD A JOB
If your dependent has a W-2 for his after-school job, summer job, etc. you do not include the information on your own return. You can still claim your child as a dependent on your own return. He/she can file his own return for a refund of some of his withheld wages (he won’t get back anything for Social Security or Medicare), but MUST indicate on it that he can be claimed as a dependent on someone else’s return. (Supervise this closely or prepare it for him!)
If your dependent’s earnings were over $400 and were reported on a 1099Misc or 1099NEC then he must file a return and pay self-employment tax for Social Security and Medicare. You may want to use this version of TT for that:
The fact that she is a student does not exempt your child from paying tax. Age is not a factor. She owes self-employment tax for Social Security and Medicare since those were not deducted from her pay. She was paid as an "independent contractor" so the IRS considers her to be self-employed.