Tax question about teenagers job

Why would he not claim the 1099 income?

I was told that if he made unde $4k he would not have to claim that income

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I was told that if he made unde $4k he would not have to claim that income

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GTD

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You were incorrectly informed by the person you were told by. The issuer of the 1099 is going to report that they paid your son the money. This is because they don't want to run afoul of tax laws.

So what that means is that if your son files for his Taxes, the IRS will have a flag that says that his SSN has a 1099 for Self-Employed wages while not claiming any additional income from that source. From there, it's a roll of the dice.

Tell him to pay the taxes as he goes next go around or not take the 1099 job. You may also want to talk to your son about the kind of work he did. If he answered phones identifying as the employer on the 1099, or customers were made to think he worked for the company and not clearly as a contractor, and he wasn't required to sign a non-compete, or he wore clothing or uniforms that identified him as the 1099 Employer, or was instructed to identify himself as an employee of the 1099 employer, then the Employer may be flirting with issues that are surrounding Misclassified Workers in order to avoid paying payroll taxes on legitimate employees.

But that's a bit of a time-consuming, arcane path to go down for what amounts to a few hundo in tax money that he may or may get a bit back of. For now, tell him to claim his income, pay if he owes, and not take jobs that pay cash if he doesn't have the discipline to save and pay quarterly or set up the right situation so he reduces his tax liability the next go around.

My advice: Don't let him young people take 1099 work during the Summer without you having the ability to withhold taxes for them or them being the types of kids that have the discipline to do it themselves. It works out crappy like this all the time.

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I was told that if he made unde $4k he would not have to claim that income

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You only have to send a 1099 if the contractor made over $600 per year, not sure where someone got that $4k number from.

If you can afford it open up an IRA for him in the amount that he made.

He's not going to owe any taxes at that income level anyway. No need to start cheating just yet...