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Financial Planning / Tax Strategies
|Subject: Uncharted waters||Date: 6/13/2012 1:23 PM|
|Author: kmart00||Number: 116254 of 125217|
Recently had a big change: DW decided to be a stay at home mom.
So, we no longer have her salary. However, she has been 'helping out' some of the contractors from her old job. She has so far gotten a check for about $300 (not much, I know, but I am wondering what happens if she does this a few times a month--we dont know how often she will get called)
Also, DD (5 months old) just got signed to be a baby model.
We are trying to balance being "high maintenance parents" and asking 'too many questions' of the agency (VERY competitive to get representation), so I am not sure yet whether the client would pay my DD directly (which could mean--if we are lucky and successful--dozens of 'employers) or if they pay the agency which would in turn pay us.
So, my tax question:
1) if the contractor pays DW but doesnt send us a W2 or 1099 and writes off the expense, do we get taxed on it? How do we document it if we need to declare? If he writes off the expense, is the IRS notified even if he doesnt send her a 1099, etc?
2) how does DD's earnings factor in when we file taxes? DW and I file 'married, filing jointly.' Do we need to include DD earnings when we file (we would be claiming her as dependent)? Part 'B' of this question is a repeat of question 1, but as it relates to DD. Particularly if we get multiple small checks (< $1,000 each) from different companies.
Thanks in advance! I want to make sure we do the right thing here :-)
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