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TomCopeland 10:25 AM 05-11-2012
You can handle this in one of two ways:
1) Non-business - give her gifts (pay cell phone, buy clothing) in exchange for her working for you. The gifts are not a business expense and they are not income to your daughter. Don't enter anything into MM.

2) Business - compensate her for her work for your business by giving her items (pay cell phone, buy clothing). Deduct the value of the items you give her as a business expense. If she gets less than $5800 worth of stuff in a year she doesn't have to report it as income because she is under age 18. Since she is under age 18 you don't have to withhold social security tax. Check with your state to see if you must purchase workers compensation insurance (probably not). You must keep careful records of the hours of work she does for your business. Enter the value of the items you give her in MM under Other Expenses - Wages.
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