As a newspaper carrier, your son may be a direct seller liable to pay self-employment tax. A direct seller is someone who satisfies the following conditions:

• The person is engaged in the trade or business of delivering or distributing newspapers or shopping news, including directly-related services such as soliciting customers and collecting receipts;
• Substantially all of the pay for these services (whether or not paid in cash) directly relates to sales or other output rather than to the number of hours worked; and
• The person performs these services under a written contract that states that the person won't be treated as an employee for federal tax purposes.

Self-employed persons, including direct sellers, report their income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). Use Schedule SE (Form 1040), Self-Employment Tax if the net earnings from self-employment are $400 or more.

If your son isn't a direct seller (i.e., he doesn't satisfy the conditions above) and is age 18 or older, he may still report income on Schedule C (Form 1040) and be liable to pay self-employment tax if he meets the following conditions to be engaged in a trade or business:

• He sells newspapers or magazines directly to customers;
• He sells them at a fixed price; and
• His earnings are based on the difference between the price the goods are sold for, and the amount that they cost him.

If your son isn't a direct seller and isn't engaged in a trade or business, but is over 18, he may be an employee whose wages are subject to income tax withholding, and Social Security and Medicare taxes.

If your son isn’t a direct seller and is under 18 years of age, he is considered an employee whose income generally isn't subject to Social Security and Medicare taxes. If his income exceeds a threshold amount to file, he must report it as wages on Form 1040, U.S. Individual Income Tax Return.

For more information on the rules that apply to direct sellers and newspaper carriers and distributors, see Publication 334, Tax Guide for Small Business. For an explanation of the difference between an independent contractor and an employee, see Publication 1779, Independent Contractor or Employee PDF and Tax Topic 762, Independent contractor vs. employee.