Teenage child was not required to file for 2023 but now realize may get a refund. Is it too late?

[Marjie33]

My teenager made less than $4000 in 2023 and we didn't file on time.  

Can we still do it?  

I read somewhere that IRS has a three-year window to file.  Is that accurate?

[rjs]

Your teenager has until April 15, 2027 to file for a refund for 2023. The three-year window starts on the original due date of the tax return, which was April 15, 2024 for a 2023 tax return.

[MindyB]

No, it's not too late.  You can still file and get a refund.  You are correct, you have 3 years from the original due date of 4/15/24 to file a return for a refund.  See: Claim a refund

You can start preparing the return by downloading the 2023 software here: File your 2023 taxes

[Marjie33]

Thank you for the response.

If teenager has 1099 income, is that considered earned or unearned?  And with 1099 income, we can expense all materials used for the job, correct?  Do we file as small business?  And can I use the free edition?

[DawnC]

A 1099-NEC is self-employment - it is EARNED income.   You can deduct self-employment expenses on Schedule C, which is where the self-employment income from 1099-nec will go.   Was that the child's only income?    

There is self-employment tax imposed on self employment net income.   

[Marjie33]

In 2023 there was W-2 income (roughly 3000) plus 1099 income (less than $500).  We should see a refund of fed and state taxes paid but not sure how the 1099 income will play out.  We do have expenses such as uniform and mileage that will likely be more than the income, resulting in a loss for the year.

Can I file just the W-2 income and not the 1099 income?

[DawnC]

You should include the 1099-nec and the expenses.   If the net income is under $400, there will be no self-employment tax.     You can't use the free edition with a 1099-nec.    You can TurboTax Online Deluxe to report the income, but if you are deducting business expenses, you need the Premium product.    

[rjs]

@Marjie33 

When you ask about a 1099 form, you should always say what kind of 1099 it is. There are over 20 different kinds. There is no plain Form 1099. All 1099 forms have one or more letters after the 1099. The most common are 1099-INT, 1099-DIV, 1099-B, 1099-NEC, 1099-R, and 1099-G. The tax rules are different for different types of 1099 forms.

If your teenager had $400 or more of income on a 1099-NEC she has to file a tax return. Technically she is only required to file if her net self-employment income is $400 or more, after subtracting expenses. But the IRS doesn't know about any expenses unless you file the tax return. They will assume that the entire amount on the 1099-NEC is profit and is subject to self-employment tax.

This is a good example of why you should give exact amounts when you post a question, not "roughly" or "less than." We can't tell whether "less than $500" is less than $400. It makes a difference.

You cannot use TurboTax Free Edition if you have self-employment income, such as income on a 1099-NEC.