When is a lemonade stand not just a lemonade stand? If your child earns $400 or more annually in profit from a lemonade stand, lawn service or other self-employment, that income may be taxable. Kids may be able to deduct certain business expenses to lower their self-employment income and potential taxes. They also have several tax responsibilities, including filing a tax return and, possibly, making estimated payments. They’re generally allowed to sign their own return, but should get adult help to prepare it. In the meantime, make sure your child keeps good income and expense records. This will facilitate easier tax preparation.
