My daughter earned $1200 delivering a weekly shopper newspaper--had no other income. If she has to report that on a schedule C, she's going to have to pay a substantial amount of income tax and self-employment tax. (She received a 1099-Misc, not a W-2.) Yet her sister, who earned $2000 in wages for part time work, gets a full refund of all her federal income tax withheld. Something doesn't seem right. Does the daughter who delivered the newspaper have to file a 1040, Sch. C and Sch. SE and pay all that tax?