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lightrain · Apr 11, 2009, 05:33 PM

A family member has been giving my three children 1099's for a least three years. When I asked why I was told that they could use them to write of taxes up to so much money. And I asked about them being to young to work . The repile was they could fold letters or put on stamps sometime. I asked if this would not be bad for the children on the 1099's since they did not even get any money for it. In repile it will help them with retirement when older, or maybe they would have them asaving open. But I have not seen any money. Years later a college fund was open for them and otherchildrn. But I think this is another write off. The only way the children ever will see the money for the college fund is if they go to college. Or the one who open I guess gets it back. So that would not be their money. So that is not fair to the children to get 1099's in their name they have not got anything for. What is the law for this I think I have been blinded on the subject.

Fr_Chuck · Apr 11, 2009, 05:54 PM

If they write the children a check and give it to you ( you can decide what to do with it) then it is OK,

Tell them they can write you a check for the money of all of the 1099 or you will send a copy of all of the 1099 to the IRS and explain what they have been doing.

MukatA · Apr 11, 2009, 08:02 PM

1099-misc means income earned as self employed. You must file tax return if the income is $400 or more. So the children will certainly get letters from IRS to report the income. Read: Your U.S. Tax Return: Tax Filing by Self Employed Sole Proprietor or Independent Contractor

BuddyMan · Apr 11, 2009, 08:51 PM

This is crazy. I'm guessing the family member who did this owns a small business. What he/she appears to be doing is taking money from the business for himself and getting out of paying the taxes on it by telling the IRS he gave the money to your kids.

Now your kids owe the taxes, if any, on this money. It does not give your kids any benefit whatsoever, does not help them with college or retirement. It tells the government that these kids are earning income and the IRS should come to them to get the taxes for this money.

You have to report this to the IRS, maybe someone knows who you would call. No one should have your kids' social security numbers. This family member is stealing their identities to get out of paying tax he owes.
What a jerk.

Even if he gives you money to cover the amount he is claiming he gave them, you could still owe taxes on this money. Not only income taxes, but 12.4% for social security too. And another 2% or so for Medicare, if I recall correctly. And that social security tax is regardless of your income, at least that is how it works for adults. So if he gives you $100, you are not really getting that much, you have to pay some of that in tax.

I guess the lesson from this is you have to guard even your kids' social security numbers.

AtlantaTaxExpert · Jun 9, 2009, 01:08 PM

I agree with the general tone of the answers, in that the issuer of the Forms 1099-MISC is claiming the 1099 income as a deduction on their small business.

Now, as to whether taxes are owed or not depends on the amount on the Form 1099. If each 1099 is less than $400, then no taxes (income or self-employment) is owed, because it is less than the minimum required to file a tax return.