Q. My 14-year-old son is cutting lawns this summer. Does he have to report this income?
A. Yes, if it exceeds $400. However, the income can be sheltered from federal income tax by the standard deduction. The normal standard deduction for 2011 is $5,800. However for dependents, the standard deduction is the lesser of: 1) Earned income plus $300, or 2) $5,800. In other words, he most likely will not owe federal or state taxes. That's the good news.
Here is the bad news. If your sons net income is over $400 he will need to file a return and pay self-employment tax.
