2006-06-15 10:13:11 · 7 answers · asked by koolbreeze 4 in Business & Finance ➔ Taxes ➔ United States
Cute question. Actually, the child would have to file a regular 1040 with a Schedule C attached, and maybe a Schedule SE as well. (The 1040EZ only applies if the child is employed and receives a W-2.)
Operating the lemonade stand makes the child self employed. Being self-employed automatically creates a filing requirement. So, the technical answer is yes, they are required to file a return reporting the lemonade stand. Does anyone actually file to report a lemonade stand, though? Probably not.
Follow-up regarding the post directly below by Johngrobmyer: Johngrobmyer's answer is incorrect. Not only did he fail to consider that the child is self employed and thus created a mandatory filing requirement, but the dollar amounts he posted fail to take into consideration that the child is probably a dependent. Filing requirements for dependents differ from those of other taxpayers.
I take offense to Johngrobmyer's opening statement regarding people having no idea what they're talking about when HIS answer is entirely incorrect!
2006-06-15 13:29:00 · answer #1 · answered by figment_usa 5 · 2⤊ 0⤋
Yes and no. Do they make $600 or more a year at the stand? If So then they may need to file a tax return. However it would be 1040 not 1040ez as you can not file Schedule c with form 1040EZ.
1040EZ is only for people who have wages and less than $400 in interest or $400 in dividend income and no other sources of income.
What is most interesting, is that it may not be the Feds they really have to worry about. It may be the state in which they reside. Running a succesful stand like that could generate a State Sales Tax problem. They need to check with thier state departments of revenue to determine thier liability for Sales Taxes.
2006-06-15 17:17:58 · answer #2 · answered by mikeae 6 · 0⤊ 0⤋
Ok..for the people who have no idea what they are talking about when it comes to taxes, please don't speak.
A child would have to make over his exemption amount (3200 in 2005) if he claims him/herself, and over the standard deduction of 5000. If he does not make over than that then his tax liability would be zero thus making it pointless to file or the IRS to handle.
2006-06-16 01:16:42 · answer #3 · answered by johngrobmyer 5 · 0⤊ 0⤋
only if you make over either $600 or $900 dollars
2006-06-15 17:15:09 · answer #4 · answered by mjc 2 · 0⤊ 0⤋
they have to make like 10,000 before they need to file
2006-06-15 17:18:01 · answer #5 · answered by Mike F 3 · 0⤊ 0⤋
If it is successful enough, they better pay the feds... OR ELSE!
2006-06-15 17:17:03 · answer #6 · answered by Amanda 3 · 0⤊ 0⤋
Only if thier parents are anal. And republican.
2006-06-16 04:29:05 · answer #7 · answered by mbmare5 2 · 0⤊ 0⤋