Background:
The child who is 19 and is filing independently for the very first time, did part-time work as a Tutor and the company that employs students, does not give W-2s, they just issue 1099s.
The Kid DOES NOT own a Business per se! They just did tutoring for a company that does issue W-2s and only issues 1099-MISC, I guess they must have figured out the students don't know much about taxes and employment and they prefer to not consider the "tutors" as employees.
Anyway,...
So, I entered the 1099-Misc info, and when I was doing the final check, TT flagged the return for the following issues:
Now that I have entered the 1099-MISC, it appears to have opened a whole new set of Can of Worms. I repeat the "kid does not have a business, but once 1099-Misc information was entered TT or the IRS automatically considers you as I think "SELF-EMPLOYED BUSINESS".
So the other flagged items all are centered around the following and deal with Schedule C.
Thank you in advance for your assistance. Any explanation to accompany the above would be help as well.
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Thank you, Vanessa. Appreciate your response and more importantly, your time.
Best wishes.
Vanessa,
For item #7 Accounting Method, the received a cheque. So, would that be considered the same as cash?
Thank you.
You probably use the cash method. The most common method is CASH. It means you report your income in the year you actually receive it and report your expenses in the year you actually pay them. See,
https://ttlc.intuit.com/community/business/help/what-is-the-cash-method-of-accounting/00/25658
The ACCRUAL method of accounting is often used by businesses that carry an inventory. You report your income in the year you earn it (not when you receive it) and report the expenses in the year you incur them (even if they aren't paid yet). See,
https://ttlc.intuit.com/community/business/help/what-is-the-accrual-method-of-accounting/00/26034
"For item #7 Accounting Method, the received a cheque. So, would that be considered the same as cash?"
Yes, check, cash, debit card...
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