Hi
My son worked doing DoorDash in 2020, earned $7K, however did not record expenses. Since he's 19 and a fulltime student he'll need to file the 8615 and used my tax rate. Can he still create the Schedule C without entering expenses? I just want the income to be considered earned income in order to boost his standard deduction.
Thanks!!
is he your dependent and your claiming this income on your return? You can use the Schedule C only if he files his own return. You can still file him as your dependent, just make sure you mark Dependent of Another on the return. Then he can have expenses against the $7,000. Be aware, whatever his net, will be subject to self-employment tax.
Yes, he is my dependent. Though, because he's always had unearned income, I have always filed his taxes separately. The problem was getting the $7,000 recognized as earned income because he falls into that 19-23 age range which as my dependent requires he use my tax rate. Once I got the income on the Schedule C, that made the difference I was looking for. It was included to determine his Standard deduction.
The Self-Employment tax is the cost of having your own business, a good lesson for him to learn early. Hopefully, he'll do a better job of recording expenses.
Thanks!