I've had my 16yo and 14yo working in our family restaurant for years. Both are on payroll, have proper work permits (check your state laws!), and actual job duties. My 16yo works the register and my 14yo does dishes and prep work. Three things that have kept us audit-free: 1. We pay them reasonable wages for our area for teens doing those jobs 2. We have actual timecards and schedules 3. The money goes into custodial accounts we set up at our bank Don't get greedy with it - the IRS definitely looks at whether you're paying your kid $50/hr for sweeping floors. But paying normal wages for actual work is completely legitimate.

Does anyone know if this strategy works for a 9-year-old? My daughter helps me stuff envelopes and organize materials for my home-based mail order business. I've been paying her $20 each time she helps but never thought about making it official.

Make sure you're tracking your mileage correctly going forward! For it to be valid for tax purposes, you need: - Start and end odometer readings - Date of each trip - Business purpose - Destination I use MileIQ app which does most of this automatically. Worth every penny for the peace of mind.

Important question: when you refile, make sure you check if you qualify for the Qualified Business Income Deduction (Section 199A). As a 1099 contractor making under $170,050 (single) or $340,100 (married), you likely qualify for an additional 20% deduction on your net income AFTER expenses like mileage. This can save you thousands more!

Has anyone considered the mortgage implications of transferring title? If there's still a mortgage on the property, transferring title to a spouse might trigger a due-on-sale clause in your mortgage agreement, potentially making the entire loan balance due immediately.

Just want to correct something I'm seeing in this thread. Adding your spouse to the title doesn't help with capital gains, but it CAN potentially help with STEP-UP BASIS if one spouse passes away. That's a completely different situation but important to understand for long-term planning. If the property is held jointly with rights of survivorship and one spouse dies, the surviving spouse often gets a stepped-up basis on the deceased spouse's portion of the property, which can reduce capital gains if they sell later.

My sister works at H&R Block and says this is absolutely NOT standard practice. She said they only need to see (not keep) certain documents to verify eligibility for specific credits like EITC or Child Tax Credit. For normal tax filing, they need: - SSNs for you and dependents (viewing the cards is sufficient) - Maybe school records or medical records to verify residency for certain credits - Income documents (W-2s, 1099s, etc.) She said they NEVER keep copies of birth certificates or social security cards - that's a massive security risk and violates their company policy. Most reputable tax prep companies have similar policies. Your tax guy is either misinformed or intentionally misleading you. Either way, I'd find someone else.

Just want to add one thing - while the IRS doesn't require tax preparers to collect and keep all those documents, they ARE cracking down on improper claims for certain credits, especially EITC and Child Tax Credit. Your preparer might be overreacting to these increased due diligence requirements. Some preparers can be fined if they file returns claiming these credits without proper verification, so some are going overboard with documentation. But "verification" doesn't mean "keeping permanent copies." At most, they should be documenting that they've seen proof of eligibility. If your preparer insists on keeping copies, ask specifically how they'll secure this information and how long they'll retain it.

From personal experience, I wouldn't bother amending for such a small amount. Last year I received a 1099-INT after filing that showed $12 in interest income. I panicked just like you, but my sister works for H&R Block and told me the IRS has a materiality threshold. The tax on $16 would be so minimal that it's just not worth their resources to pursue. If they do notice (unlikely), they'll just send a letter adjusting your tax by a couple dollars.

I literally just went through this exact thing! Had a tiny 1099-R with like $20 taxable that arrived after I filed. I called the IRS (took forever to get through) and the agent told me that while technically any income should be reported, they don't typically pursue amounts this small. She said I could file an amended return if it would make me feel better, but that the system might not even generate a notice for such a small amount.