1099 and taxes

[NHRef]

One place my kids and myself ref just sent us 1099 for WAY under the limit. I had the high one at $200. My question is, this is probably the only reported income my kids make and even counting cash fees from last year they are under $1000.

Do I need to file tax returns for them becuase of the 1099?

[ref47]

this leads to interesting discussion. the threshold for filing a tax return for a taxpayer who is single is about $3500, as i recall. under 3500, no need to file; unless, you are claiming refund of deductions, which is not the case with a 1099-misc. however, as an independent contractor, you need to pay into disability/ssa, etc. based upon gross earnings. i am not sure of a threshold for this. the positive in paying into this is you count "quarters" for collecting social security someday. the downside is, most people will probably have enough big income later to qualify for social security retirement payments and not need this tiny income.

i hope our tax guy helps us out here.

[falcon.7]

It seems every year we have this discussion and every year we come up with different answers on the best way to file. The new buzzword I am hearing now is "Schedule C-Sports Official". Apparently its a separate category with different rules. I've also heard of people filing under "Miscellaneous Income-Hobby", and "Other Income". If you do decide to file, nickle and dime the government - deduct mileage, shoes, clinics, gear, anything related to refereeing that you had to pay for.

And if you don't decide to file, I'm sure the IRS won't go after your kids for the $50 they're owed. If they do it means they have WAY too much time on their hands.

[GKbenji]

IIRC, if your kid is listed on your tax return as a dependent, the rules about whether they must file (income threshold, etc.) is different. Make sure you check that angle out as well.

[njref]

Technical answer, a child is required to file if he or she has over $400 in self-employment income. SE income is tested on a net basis, after expenses. Over this threshold you have SE tax (the equivalent of employee and employer FICA). Or if he or she has over $5350 in earned income, or $850 in unearned income, etc.

The proper form is schedule C or CZ for referees that are not employees and receive form 1099. There is no special form for sports officials as far as I know. I would not report the amounts as other income, the IRS might get confused with your reporting and it will be hard to take any deductions.

[jkc313]

On the bright side, filing the 1099 gives proof of earned income which may be important if your kid wants to start a Roth IRA, which is a terrific idea. Putting away a few hundred doallars and letting it grow in a stock mutual fund for 50 years is just a really good idea. If the money doubles every 7 years which is average $100 becomes $12,800 at retirement time. My kids have done it. Wish I had 50 years ago