Hey @Lindsaysv7 , your daughter will need to file her own tax return if the 1099 is more than $400. You cannot claim her income on your return. You can still claim her as a dependent, as long as she lived with you and did not provide more than half of her own support. Just make sure that she marks on her return that she will be claimed by another taxpayer. Please refer to the article Should I Include a Dependent's Income on My Tax Return?
Depending on how your daughter earned the income, she will likely need to pay Self Employment tax on it. When an individual has an employer, the employer withholds taxes for them. Since she did not have an employer, she will be responsible to pay both the employer and employee portion of the tax (15% of her gross income). Other than that, it's your daughter's money. Ask her how she'd like to save or spend it. Congrats on your go-getter!
K. Carini, EA
