<p>I have filed taxes for him before, because of his college accounts. However, this year he started tutoring from time to time and has made a little money (it may well be under $400, in itself). Do I have to put him as 'self employed' which would mean he would have to file other than a 1040A (I think...). Do kids who babysit put themselves as 'self employed' on this stuff? This seems crazy, to be honest. Have any of you run into this?</p>
<p>I am not a tax expert but it seems to me that this sort of tutoring fits in with babysitting, lawn mowing, dog walking etc which is household worker and not Self employed. The difference being that for tax purposes, SS and medicare has to be paid when someone officially “self employed” earns a certain thresh hold. of earnings.</p>
<p>More important than where this should be reported as earnings, however, (since it’s no where near the amount that it starts to affect fin aid calculations) is if he has money sitting anywhere. That can be a 20% hit on the FAFSA EFC and even more at some some PROFILE schools. If he has money sitting anywhere, it behooves him to spend it down or reimburse you for his year’s expenses and you can put it in a joint acct with your SSn and name primary so that if falls under your assets with possible asset protection and a much lower 5.6% hit on parental assets over that threshhold. Some schools really hit up the student assets very hard and sometimes track them for all four years starting with the first year base. Remember, the asset amount is what is sitting in the account the day you file the FAFSA and PROFILE forms. Make sure balances are as low as possible. Payday is not a good day to file.</p>
<p>Thanks. I don’t have a problem reporting the income, just with the status of ‘self employed’. I doubt he exceeded any ‘thresholds’ if there are any, and he won’t have enough of it left to worry about decreasing awards. His college accounts are a different issue, and thank you for your answer on that point, as well.</p>
<p>
</p>
<p>“Household worker”? Sorry, but I don’t think that’s a category the IRS recognizes!</p>
<p>Put whatever you want on the CSS Profile - the colleges aren’t going to report your kid to the IRS. But if he has self-employment income in excess of $400, he is supposed to declare it and pay self-employment tax. Do most teenagers do this? Of course not.</p>
<p>It might not be a bad idea, though, to encourage him to start keeping a ledger to record his earnings. It’s just a good habit to get into.</p>