Other Income not being added to Earned Income in calculating standard deduction for dependent

Torgesen
Torgesen Member Posts: 3 Newcomer
in Income

Our son(19yo in college, dependent), has total income of about $6000, which includes some W-2(~$2500) and some miscellaneous/other income(~$1800), and div/CG(~$2000) from a mutual fund. As a dependent, his standard deduction should be calculated as his earned income plus $450(so about $4350). But FreeTaxUSA is not adding the other income to this calculation. It seems like a bug in the software, but I don't want to pay for the deluxe version to chat with someone about their problem. Have any of you experienced this? Or am I missing something?

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Answers

  • JMSSGV
    JMSSGV Member Posts: 243

    Did you identify the other income as earned income? If it was on a 1099-MISC, it might not be earned income. Did it get transferred to a Schedule C as a business? If not, what kind of income was it?

  • Torgesen
    Torgesen Member Posts: 3 Newcomer

    It was a 1099-NEC. He loves to play volleyball, so he refereed a volleyball tournament last year. The income is from that. Since it was a one-time thing, we didn't think we needed to declare it as a business and file schedule C. So we just added it to his tax form as miscellaneous income. According to the 1040 instructions on the irs website, all of those additional income categories should be added to calculate the earned income.

  • Torgesen
    Torgesen Member Posts: 3 Newcomer
    https://community.freetaxusa.com/discussion/comment/5406#Comment_5406

    It was a 1099-NEC. He loves to play volleyball, so he refereed a volleyball tournament last year. The income is from that. Since it was a one-time thing, we didn't think we needed to declare it as a business and file schedule C. So we just added it to his tax form as miscellaneous income. According to the 1040 instructions on the irs website, all of those additional income categories should be added to calculate the earned income.

  • KeriC
    KeriC FreeTaxUSA Agent Posts: 196

    @Torgesen
    1099-NEC income is considered self-employment income and does need to be reported on Schedule C.

    "Other Income" isn't considered earned income by the IRS, but Schedule C income is.

     If you have additional questions that are specific to the account, you can always contact Support from within your account. You do not need to upgrade to send a message to receive help.

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