pls advise: child making money, how to work on tax

Forum|Forum|1 year ago
September 20, 2024
1 reply
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my child is writing a book, and I think it looks amazing and plan to help publish it. we will prob invest quite a bit on third party services, including proof-reading, formatting, graphic design etc.

question:

1- the tax consequences: since i am including the as my "dependent", will the cost be deductible under me when we do tax return?

2- do we need to provide "1099" to service contractors? say, I pay 300$ to some graphic designer?

I am sure there are a lot of entrepreneurs here. pls advise if you can. Bless you all.

apple-Sweet-zAuthor

i have the following info from TT:

"Children who only have earned income from a job or self-employment, don’t make enough money to be required to file, or are filing jointly with their spouses are exempt from the Kiddie Tax."

Still not sure if we need to provide 1099 to contractors for paid services.

VolvoGirl

Employee

You need to give a 1099NEC (previous a 1099Misc) to anyone you paid $600 or more to for the year. But not to corporations or for merchandise. You send the IRS a copy of the 1099NEC with the transmittal summary form 1096. These are due to the person by Jan 31 and to the IRS by Jan 31 also.

How to create W2s and 1099

https://ttlc.intuit.com/community/forms/help/how-do-i-create-w-2-and-1099-forms-in-turbotax/00/25869

You will need to manually enter the amount on your Schedule C as Contract Labor line 11.