dependent tax return

Forum|Forum|5 years ago
January 27, 2021
1 reply
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My dependent has a 1099-NEC with Line 1 amount of 2711.00. Does he need to file a tax return?

ColeenD3

Level 15

Yes. All income must be reported. Although the IRS has a filing requirement, self-employment income is treated differently, since you are required to pay both Social Security and Medicare taxes on the income. The threshold is $400.

She will need to indicate that she is being claimed as a dependent on her return.

Hal_Al

Level 15

Although it may be news to you and your dependent that you “have a business” (and most of the other people who get their first 1099-NEC); The IRS considers anything on a form 1099-NEC to be self employment income. Enter the 1099 income, at Other Common income / income from a 1099-NEC . TurboTax (TT) will complete Schedule C for you and allow you to deduct any expenses associated with this income. You'll also have to pay self employment tax (social security & Medicare) on any profits greater than $432. These types of payments are frequently done this way. Your "employer" is not the only one.

The IRS also considers undocumented cash income (no W-2 or 1099), for work performed, to be self employment income.

You cannot use TT free online software with a 1099-NEC but

TurboTax also has another free product called the Free File Edition (not to be confused with the regular Free Edition). It has free Federal preparation and free State preparation. There is no efiling fee. It is not available after October 15

The Free file Edition can handle a 1099-MISC.

The Free file Edition is more fully-featured than the regular Free Edition. The Free File Edition can prepare Schedule A, C, D, E, and F that the Free Edition cannot.

To qualify for free 2020 federal and state tax returns through the IRS Free File Program delivered by TurboTax, you just need to meet one of these requirements:

Your 2020 household AGI is $39,000 or less;
You qualify for the Earned Income Tax Credit (EITC); or
In 2020, you served as active duty military (including Reservists and National Guard) with a maximum AGI of $72,000, and you have a military-issued W-2.

The FREE FILE Edition is located at:
https://turbotax.intuit.com/taxfreedom

How to switch and start over in Free file Edition
https://ttlc.intuit.com/questions/2026912-how-do-i-switch-to-turbotax-freedom-edition