Originally Posted by ATK:
Thanks Tom!
So if she makes less than $600 does SHE then claim it on her taxes or only if above that?
I guess I am confused. My parents pay ahead of service so if family A,B,C each give me a check Friday for $200 for the next week M-F. I automatically set aside 20% of that for my own taxes so I'm left with $480 ($96 a day). Say Tuesday my youngest is sick and I need her to cover 7 hours that day ($70). I now have $26 left for that day. Do I save this for her part of the taxes or do I withhold from her $70?
And where do you figure out the withholdings etc?
Thanks!
When you hire someone to help you care for children, it doesn't matter how little you pay them. The $600 you refer to has to do when you hire an independent contractor - then you don't have to issue a Form 1099 Misc if you pay the person less than $600. But, any money you pay an employee is subject to withholding taxes and the employee must report it as income, no matter how little money is involved. You do the withholding on the amount you pay your employee. The amount you pay your employee is deductible to you as a business expense. Therefore, you only need to set aside money for your own taxes on your profit (after all your expenses, including employee wages).
Here's more details:
http://www.tomcopelandblog.com/2011/...-employee.html