Helping daughter with taxes - How do I report some freelance work for her?

I'm helping my 16 year old daughter do her taxes. She has a job where she got a w2 and that part is fine (I was able to add that easily into Turbo Tax).

She also helps a very small piano shop where she tutors piano to little kids. The owner of the shop just writes her a check in her name every few weeks (no taxes are taken out of it its just a physical check that we have to cash at the bank).

All I do is keep track of this information like so:

A total of $894.00.

Should I be reporting this as "Self-Employment" under schedule C: 1099-NEC, 1099-K, expenses (in turbo tax) ?

If so turbo tax is basically telling me I need to go from Free Edition to Deluxe Edition.



Am I doing this correctly? I assume I have to report this income otherwise the IRS wont be happy. For context she has made around 15k from her W2 job so she is required to do taxes.

One of the answers states to enter this in as misc. income. However, turbo tax does not allow that. It says the following:

Entering a Form 1099-MISC for self-employment income If you received income from a client or company you did work for, you're considered self-employed and must pay self-employment taxes. You should receive a 1099-MISC or a 1099-NEC from each business or vendor who paid you over $600 for this work.

To enter income from your self-employed work, select No and enter that income under Self-Employment on the following screen.



Should I be reporting this as "Self-Employment" under schedule C:

That would be the "correct" way. The "correct" way would be for the owner of the piano shop to issue your daughter a 1099-NEC statement which would make it easy for them to claim the money paid to your daughter as a business expense. You should ask them whether they are planning on doing that. The deadline for that would be Jan 31, 2025.

I assume I have to report this income otherwise the IRS wont be happy

Highly unlikely. Given the small amount of payments involved and the fact that there are no taxes are due either way, the chance of an audit and any related follow up actions are extremely small.

This being said, its good practice and good role modelling to do the "correct" thing, if it's a little more work and may cost a little more money.

This can be reported as "misc. income" on Schedule 1 line 8z. It doesn't have to be Schedule C, especially if she has no related expenses and doesn't carry this activity out regularly. I believe you can do Schedule 1 line items with the free Turbo Tax still.

Hilmar's comment about 1099-NEC still stands. Not only for the piano shop owner to be able to deduct the payments, but also for your daughter to claim them as earned income. That makes this amount eligible for an IRA contribution, which I think may be a good idea to consider. You've added that the W2 income is about $15K, so this is more than enough for an IRA contribution. I strongly advise to consider it. The deadline for IRA contributions is the tax due date (April 15th). The compounding effect of early IRA investment will be huge at her retirement time. I also suggest considering Roth, since the amounts of her income are relatively small, and the tax benefit down the line would be huge as well.

I assume I have to report this income otherwise the IRS wont be happy

Actually, it's not unusual for the income to qualify for a variety of treatments depending on circumstances. Is it a business? Is it a hobby? Is it a loan? Is it a gift? Things change depending on a situation, the facts and the circumstances of each specific person and event. In your particular case this may be considered "hobby income", since she's not in a business of music tutoring. Hobby income is different from business income in a sense that she can't claim losses, but since she has no losses it may make the tax filing much easier.

If so turbo tax is basically telling me I need to go from Free Edition to Deluxe Edition.

Don't use either.

The IRS (still) has a free filing program which is based on AGI, not the complexity of the forms. In addition, they have an option for you to just fill the forms yourself. See here. The incoming administration indicated they want to get rid of this program (being it in competition with the Intuit money maker), but until they succeed you can still use it.