Filing 1099-MISC for a child

[lighter1]

Hello,

I usually use TurboTax to file joint return for me and my spouse and I add my child as a dependent, but in 2015 our child (who didn’t reach the age of 17) had an income (~$1,300) as well and as a result the child received 1099-MISC. I wonder how to file TAX return for 2015 – can I do that in the same return I would file for me and my wife or my child has to file the return completely independent from us? And additional question – if the child has to file the return independently – may I include my child as dependent into our joint return or not?

 I searched the forum and found topics with similar questions where the answer was pointing out that the child has to file return in this case separately but at the same a friend of mine (who is not tax specialist though) told me that she did a research and found out that a child has to file separate return ONLY if the child’s income exceeded $3,500. So, now I am not sure what to do. I have not found any place in TurboTax to enter my child’s income and I am trying to figure out whether that is just because of Turbo Tax limitation or because it is really not allowed by IRS? If it is not allowed by IRS would be good to have some link to a document which proves that. Can anybody help please?

[VolvoGirl · Accepted solution]

You do not enter the child's income on your return.   You can still claim him as a dependent.  He has to file his own return for the 1099Misc.  Even though there won't be any regular income tax on it, He has to pay self employment tax on it.  Your friend is wrong about the 3,500.  If a dependent only got a W2 they don't have to file unless it's over 6,300.  But you have to file if you got a 1099Misc no matter the amount.  

On the Child's return be sure to check the box that says he can be claimed on someone else's return.  That is VERY important.  Double check that.  

The Online version is only good for 1 return. But you can use the same email address for 5 accounts.  To do another return you have to set up a new account and new user name and pay any fees again. So if you have more than 1 return to do it might be better to buy the Desktop program.  And Desktop has more features.

How to start another return in the Online version
https://ttlc.intuit.com/questions/1894512-how-do-i-start-a-second-return-in-turbotax-online

OR the child can use the Tax Freedom website,  which is free for federal and state.  And has more forms than the Federal Free Edition, like the full 1040 return and Schedules A, B, C , D, E, F, EIC, H, K-1, SE,  etc.

To qualify for the Tax Freedom website  you just need to meet one of these 3 things
AGI $31,000 or less
Active duty military with AGI of $62,000 or less
OR qualify for EIC (earned income credit.)

In order to use the Tax Freedom Edition, you have to start it at a special website:
http://turbotax.intuit.com/taxfreedom/

When you get to Tax Freedom use the link to "I Qualify, Start Now" at the bottom instead of the sign in link. And you have to create a new account, if you use the same account info it will take you back to Turbo Tax.

[lighter1]

Thank you very much for so detailed answer. I would like to ask for one clarification: I played a little bit with my return by trying to see what will happen to it if I remove my child as dependent, once I did that - nothing was changed. This means that I just didn't have a child credit due to number of different reasons, am I right?
Now the main question: taking into account this info - do you think it still makes sense for me to specify my child on my return as dependent or not really?

[mwarner907]

I was just on the phone with turbo tax support, she told me that am able to put my child's 1099misc. on my return for AK PFD as long as it is less than $10,500.... she also informed me that if I wanted to talk to a turbo tax cpa, I would have to pay extra. This was a scenario that this support person had never encountered,  she gave me three separate answers that were discovered by me to be incorrect. I'm still not convinced that have the right solution. I don't blame this support person, I blame turbo tax for not giving their support people the proper support that THEY need.

[VolvoGirl]

You have added on to a 3 year old post which wasn’t even about the Alaska PFD.  You probably should start your own new post.  

There is this FAQ <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/2414465-where-do-i-enter-my-alaska-permanent-fund-dividend-alaska-...>

[rjs]

@mwarner907  The phone support agent is correct in telling you that you are "able to put my child's 1099misc. on my return for AK PFD as long as it is less than $10,500." However, the only advantage of reporting the income on the parent's return is that it's less paperwork. It will not save any tax, and in many cases you could end up paying more tax overall than if you file a separate return for the child. Publication 17 has a long list of reasons that reporting the income on the parent's return could result in paying more tax. See "Effect of Making the Election" on page 201. So the safest course is to file a separate return for the child. You will probably be better off that way, and certainly no worse off.

If you have more questions about this, please post a new question of your own. Do not continue the discussion of your child's Alaska PFD here. As VolvoGirl said, the original question in this thread from three years ago has nothing to do with the Alaska PFD.