Paying My Daughter and Taxes

[Thriftylady]

Something I did for years has now become complicated.

When I had my daycare before, I paid my son to help me out with some things. Now for a few years my daughter, who is 16, has been paid to clean hubby's semi. I always deducted the small bits I paid, because my kids were way under needing to pay any taxes or anything. But last summer my daughter got her first job and made $2700, didn't have to file but they owed her money back. And she got a raise at her summer camp job already signed her contract for this year and plans to get a winter job when she gets back this summer. She wants to help with daycare, no school today and my first kiddos started today sibling school agers and my daughter has been having a ball doing crafts with them, helping with learning time, etc. She also helps with cleaning and such. So I guess my question is if I pay her and she makes more this year, am I putting her in a bad tax situation? I would like to know before I get her in to deep.

[TomCopeland]

paying daughter

Something I did for years has now become complicated.

When I had my daycare before, I paid my son to help me out with some things. Now for a few years my daughter, who is 16, has been paid to clean hubby's semi. I always deducted the small bits I paid, because my kids were way under needing to pay any taxes or anything. But last summer my daughter got her first job and made $2700, didn't have to file but they owed her money back. And she got a raise at her summer camp job already signed her contract for this year and plans to get a winter job when she gets back this summer. She wants to help with daycare, no school today and my first kiddos started today sibling school agers and my daughter has been having a ball doing crafts with them, helping with learning time, etc. She also helps with cleaning and such. So I guess my question is if I pay her and she makes more this year, am I putting her in a bad tax situation? I would like to know before I get her in to deep.

For 2014 the amount a child under age 18 could earn and not have to pay any taxes was $6,100. It will be slightly higher for 2015. Check with your state to see if you must purchase workers compensation when you hire your daughter. If not, then there is a tax benefit to paying her. Keep careful records of when she worked, when you paid her, and how much you paid her.

[Thriftylady]

Oh good to know. I have always used $3000 as the amount she could make and not owe taxes. Either I got an odd number in my head or haven't kept up with the times . Thanks for the info.