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1) if DD does get hired, does that mean she pays for tolls and parking? Then she could deduct that?

I'd say yes. She would deduct the tolls and parking, for both the gigs she gets AND the auditions that don't result in work. These are probably employee business expenses (most of the time she will get a W-2 and not a 1099) and will end up on schedule A.

2) The only reason we are doing this is to try to fund her 529. I have a savings account that I control, but she is beneficiary. From this account, I was planning on moving the funds to my account to deposit into her 529 (and thus deduct on my NY State tax return. Based on this info, sounds like that would not be legal? I suppose I could leave the funds in her savings account then fund her 529 from there and deduct from her state tax return?

I'm not very good at 529 plans, so wait for the inevitable corrections. 529 plans are funded by parents (or others) for a beneficiary - typically their child. So I don't think DD could contribute to her own 529 plan. And I don't think that transferring the money from her to you so that you can fund a 529 plan is an acceptable use of her funds.

In short, I don't think this is a good way to fund a 529 plan.

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