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Yes, that is all you need to do. The form you would issue them is the 1099-misc and report their earnings in box 7 of that form. Refer to the following 1099 instructions on page 8, Item K, which explains that sole proprietors who have no need for an EIN number should just use their SS number for 1099 reporting.
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Thank you paralegal
Hello again paralegal,
Any income from self employment of $400 or more for the year must be reported because of the SS and Medicare taxes which are due. In your particular case, neither of them will actually owe any income tax because they will each still be allowed to claim their standard deduction of $5,700. I assume you will still claim them as dependents on your own return, so they cannot also take their own personal exemption. But the standard deduction will still be allowed and this will end up leaving them with no actual taxable income.
Also, wages that you pay to your children to help you in your business are not subject to SS and Medicare taxes if the child is under the age of 18. So your 14 year old should not end up owing any taxes at all. But the 18 year old will end up paying just the SS and Medicare taxes due on the amount he earned.
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