Teenager income

[BARnone]

My teen earned $1589 at a summer job that issued a W-2. He also earned $1500 from a church that issued him a 1099-MISC.  I am under the impression that since he has income over $400 on a 1099-MISC he MUST file a federal tax return no matter what.  This results in a a tax liability of $114, which he is not happy about. Is he required to file a federal tax return?

[JotikaT2]

Yes.

Since he was issued a Form 1099-MISC and the amount exceeded $400, he does need to file a return.  

Gross income amount for dependents

The way you report the 1099-MISC will depend upon whether he earned the income as part of a business or not.  

If you are reporting this income as self-employment income (meaning you are running a business with the intent to make a profit), you will do the following in the Federal interview section: 

1. Select Income & Expenses 
2. Select Self-employment income and expenses 
3. Proceed through the screens to enter your information 
4. When you see the following for income, make sure to select "Other self-employed income.  Includes 1099-K, cash, and checks." 

If it is not from self-employment, you would enter the information as follows: 

1. Select Income & Expenses 
2. Go to the  All Income section and select "Less Common Income" 
3. Select "Miscellaneous Income" 

You will then select "Other reportable income" to enter your income from your 1099-Misc.

Be sure to indicate that he can be claimed as a dependent by someone else.

[NCperson]

yes he is,,,

think about it this way... on the w-2, social security and medicare was already withheld in the the paycheck (and then the employer pays a matched amount to the federal government)

but on a 1099-misc, that doesn't occur, but the tax is still due.  So your son is responsible for both his half and the employer half of medicare and social security.  hence the $114.  He'll hopefully get it back when he is 67!

[BARnone]

Thanks for the help. 

TurboTax keeps pushing the income from the 1099-MISC down into a business income and wants a schedule C filled out. He's just a teenager doing a part-time job for a church. Do I need to list this as business income with a schedule c?

[BillM223]

"Do I need to list this as business income with a schedule c?"

Yes, you need to have a Schedule C on his return. As NCperson said, this work is employment but paid on a 1099-MISC instead of a W-2, so he must pay self-employment taxes.

His "business" is supplying these services to the church.

This is how the "employer" (church) avoids paying these same taxes, by putting it all on the "contractor".