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Pocket cash for minor triggers filing

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in Small Business Tax

Q. My 14-year-old daughter was paid about $500 for doing part-time work for a family friend’s company. Will she get a W-2? R.H.A., Cortland, N.Y.

A. No. She won’t receive a W-2 because she wasn’t an employee of the company. Nor does the friend’s company have to send your daughter a 1099 because the annual amount was less than $600. If this was your daughter’s only income, she won’t owe any federal income tax on those earnings because they will be sheltered by her standard deduction. Nevertheless, she is technically required to file a tax return with Schedules C-EZ and SE because she received more than $400 of self-employment income.      

Tip: Your daughter may owe income tax based on her unearned income from investments.

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