FAFSA question - self-employed (ish?) student

[EmilyGF]

Hi all,

I'm muddling through the FAFSA for the first time.

DS17 teaches piano to two different families on a weekly basis. He has never filed taxes, but now that I'm working on the FAFSA, I realize that he might be required to for the self-employment tax. Now, I certainly never filed taxes for babysitting, and I made bank babysitting. But, I also didn't get checks for babysitting.

Have you come across a situation like this? What is he supposed to do?

Thanks, Emily

[kokotg]

My understanding is that he doesn't need to file taxes if it's under a certain amount (google tells me that it's $12500 for a single filer). I think he'd still need to report it on FAFSA, but he doesn't need to file taxes under that threshold: https://www.hrblock.com/tax-center/income/other-income/how-much-do-you-have-to-make-to-file-taxes/

ETA: 

Quote

Oftentimes, students may work jobs with minimal earnings (i.e. babysitting), and are not required to file a tax return. This is seen as untaxed because these earnings are not being reported to the IRS and are not having Federal or state taxes deducted from them. Even if not reported to the IRS via a tax return, these untaxed earnings still must be reported on the FAFSA.

https://www.nitrocollege.com/fafsa-guide/student-untaxed-income

Edited October 19, 2022 by kokotg

[skimomma]

One does need to file taxes if they make $600+, be it self-employed or otherwise.  Although, I'd guess most people who made $600+ babysitting, mowing lawns, or anything else where no one filed a 1099 for them are not filing at age 17.  My dd is/was self-employed and did have to file as she is a gig musician and some venues and most festivals did file 1099s for her.  And is was far over $600, so appropriate.  It is a pain, but it is what it is.  If your ds is on the line, I would not bother as I imagine his students are not filing 1099s.

[kokotg]

4 minutes ago, skimomma said:

One does need to file taxes if they make $600+, be it self-employed or otherwise.  Although, I'd guess most people who made $600+ babysitting, mowing lawns, or anything else where no one filed a 1099 for them are not filing at age 17.  My dd is/was self-employed and did have to file as she is a gig musician and some venues and most festivals did file 1099s for her.  And is was far over $600, so appropriate.  It is a pain, but it is what it is.  If your ds is on the line, I would not bother as I imagine his students are not filing 1099s.

I think the $600 thing is about when companies are required to issue a 1099 for freelance work, etc. (I think that you're supposed to report income less than that, too, but the IRS won't have a record that you received it if there wasn't a 1099 issued). But that has to do with reporting income additional to your regular wages. If you're total income is under a certain threshold, you're not required to file that year. (You might do it anyway to get back any taxes that were withheld from paychecks): https://www.irs.gov/publications/p501#en_US_2021_publink1000270109 

[crazyforlatin]

So if it’s paid via cash we still need to report it on FAFSA?