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April 17, 2023
Question

1099-misc for college student child (21 year old)

  • April 17, 2023
  • 1 reply
  • 0 views

My daughter in college received a 1099-MISC for a summer research project.  She received $6000 as reported in Box 3 for Other income.  At first I entered it in a manner that was treated as self employed income and subject to self employment tax.  Advice from this community taught me how to enter it as other income so she won't have to pay self employment taxes.  However, following this did avoid having her pay self employment taxes, but it did then require a Form 8615 Tax for Certain Children Who Have Unearned Income.  This resulted in only a portion of the 6K being taxed at my daughters rate and the rest being taxed at my rate, which is much higher.  The total amount due under this approach being much higher that what would have been due from just sticking with the self employment taxes.  Am I missing something here?  It seems that if she had just been paid 6K under a w2, tax liability would have been much better.  Thanks so much for any advice!!

    1 reply

    Employee
    April 17, 2023

    You filed properly. Yes, a W-2 would have been better but unfortunately that was not the case.