Taxes, Is It Possible?
 

My daughter has been working with me since June 2010 and I pay her weekly, but I did not pay any employee taxes.
My question: Is it possible to figure out who owes who?
I am going to use a tax person, but I just wanted to see what others think?
And another question: Can she do her own taxes? she lives with me.
Thanks.

How old is she?

Originally Posted by marniewon:
How old is she?

She is 18,,

Oh, then I can't really help you :( If she was under 18 you wouldn't need to take taxes out for her.

You can claim up to $600 quarterly for her without withholding. You can probably go back and figure it all out, do the withholding and then claim it all, but it would probably be easier to just claim $600 quarterly for her.

If she lives with you, you can still claim her on your taxes as a dependent.

That is what I would do.

She needs to do her own taxes.

Employee
 

When you hire your own child age 18 or older you must treat this person as an employee. This mean withholding social security tax*, withhold federal and state income tax. You should check with your state department of revenue to see if you must pay state unemployment taxes or purchase workers compensation insurance. You must also be keeping good records of when she worked and what she did.

Your tax preparer can help you fill out the forms to catch up. You will owe a penalty.

* The new tax law says you won't withhold the employee share of social security taxes (6.2%) from her pay.