I had a recent issue come up with a client who has the kids receiving income from the business. Here is the advice from my CPA.
Students should take advantage of tax-free earnings limits. If you anticipate making less than the annual standard deduction ($12,200 for single in 2019), none of your earnings are subject to federal taxes! If possible, earn at least that amount each year to maximize your tax-free earnings. Remember, if you can be claimed as a dependent on someone else’s tax return, the limits for tax-free unearned income such as interest and dividends are lower.