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Question & Answer: Paying My Daughter: W-2 or 1099?

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Questions and Answers

Question: I will hire my 15-year-old daughter to work in my single-member LLC business, and I expect to pay her about $12,000 this year. Do I pay her through payroll checks and file a W-2?

Answer: Yes. And W-2 payment is essential. If you pay her on a 1099, she will pay self-employment taxes.  When you pay her on a W-2, neither you nor your daughter pays any Social Security or Medicare taxes, and in most states, you also don’t pay any unemployment taxes.[/vc_column_text][us_image image=”3662″][/vc_column][/vc_row]