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I would like to hire my 18 year old daughter at daycare part time. My tax person said I need to set up a payroll system and pay in taxes for her. Then I was told by someone in the daycare field that I can pay her cash and 1099 her at the end of the year. What is the best/easiest way to hire her? If it is a payroll company where do I find one?
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Payroll
If you pay your 18 year old to help you care for children you must treat her as an employee and withhold payroll taxes. You may also need to purchase workers compensation insurance. Do not listen to the child care person that you can pay cash and file a Form 1099. No! That can get you into trouble. If you want a payroll service to help you with the record keeping, you can Google "payroll service in Omaha, Neb" to find some. Ask your tax preparer if he/she does this.
There is another way to go. Don't hire your daughter. Have her work for you. Then give her gifts as a mother would give a daughter. The gifts are not income to the daughter and are not tax deductible to you. No record keeping, no payroll taxes, no workers comp. For details, see - http://www.tomcopelandblog.com/2011/...ve-or-not.html
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