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Cory26 · Jan 24, 2008, 05:38 AM

I am self employed, owning my own business. I don't have any employees, however I paid my daughter $550 through-out the year to clean my office, etc...

Can I claim this? If so, what would I enter it under (possibly misc expenses?)
I tried to enter it into the tax software and it said I had to have a EIN.
Also, if I do claim this, will she then have to pay taxes on it?

AtlantaTaxExpert · Jan 24, 2008, 09:10 AM

Yes, you CAN claim that as wages paid.

Since she is your daughter, NO FICA taxes need be paid.

You list it as WAGES on the Schedule C (Line #26).

Cory26 · Jan 24, 2008, 10:04 AM

Thanks!

How about proof, should I ever get audited? I paid her weekly, however it was just cash. With her being my daughter, I didn't do anytype of receipts or anything like that.

AtlantaTaxExpert · Jan 24, 2008, 10:44 AM

For only $550, the odds are the IRS will not even ask about it.

However, if they docall and check, just tell them you paid in cash. Make sure that she is ACTUALLY doing the work and she understands that she got paid the money for work done, not just an allowance.

In the future, write her a check to establish a paper trail.