have a family member with the following scenario
mom & pop claim child under 25 as dependent. she is a full-time university grad student and has recently won an award due to placing well in an academic case study write-up contest. monetary award is a few thousand dollars.
since she works part-time at the uni, is the monetary award added to her income directly, ie. assuming income of 10k and award of 5k, total income 15k or is there something else to be aware of?
I've told mom & pop to submit the W-9 as it looks to be simply a way to certify to the award issuing source the tax status of the award recipient but the parents are worried about future tax implications and my non-educated guess is that they could simply take part of the award and make an early tax payment to IRS during the year if they suspect there would be a tax payment consequence next year
if the early tax payment is a plausible solution, is there some best way of accomplishing this or some form to submit explaining why they are sending the payment now instead of next year ?
they have already submitted 2007 income tax returns for everyone