1099-NEC for dependent children

[ThomasM125]

The self-employment income is subject to self-employment (social security) tax of close to 15% on the net income from self-employment. So the minimum tax would be over $200. You can deduct any expenses that are ordinary and necessary for the service performed. Also, there are a couple extra forms that need to be prepared when you are self-employed, that is why the tax product costs more.

[VolvoGirl]

@Anonymous   Yes you have that right.

[mario64fernandez]

if a minor receives a 1099 NEC is that supposed to be reported

[VolvoGirl]

Yes,   If you got a 1099Misc or 1099NEC you have to file it as self employment income no matter how small the amount.

To file a separate return as a dependent you need to set up a new account separate from your parents. Online is only good for one return per account. You can use the same email address for 5 accounts. You can probably use the Free Edition or the Free File website
https://ttlc.intuit.com/community/using-turbotax/help/how-do-i-start-another-return-in-turbotax-onli...

Be sure on your return you check the box that says you can be claimed on someone else’s return. If your only income is W2 and under 12,400 you do not have to file a return except to get back any withholding taken out.

Filing requirements for a dependent
https://ttlc.intuit.com/community/children-dependents/help/do-i-need-to-file-my-own-taxes-if-i-m-a-d...

[Dmpister]

I'm a little confused between earned income and business income. My 20 yr old daughter got a 1099 NEC for $4500. Do I file taxes for her or not?

[Vanessa A]

Yes, if she received more than $400 as an independent contractor, she will need to file a tax return. 

[VolvoGirl]

Yes business income is earned income.  Actually the Net Profit on Schedule C is the amount of earned income.  Even there is no income tax on 12,550 or less she still owes self employment tax on it.

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit (If it is greater than $400).  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.