A different tax question

Two kids. Mother has sole custody. Mother claims daughter on taxes each year, father claims son. Last summer, 14 year old son worked for his stepfather and made 1600 which is being reported on a 1099 misc.

Received email from mother stating that the 1099 would be mailed to father because he was responsible for reporting the income because father claims son as dependent.

I've done some research and think I've found my answer, but would like some input from some of you more savvy peeps. What we plan to do: claim son as dependent but not claim income. Once we have filed (so she can't send in the taxes, let him claim himself as a dependent to screw us up), send 1099 back to mother and inform her that son will need to fill out his own taxes and pay his own taxes on that amount of money (will be over 200 dollars according to turbo tax).

So the question I have is this: Father will not be responsible for actually PAYING son's taxes since father claimed him as a dependent, correct? What I read somewhat clearly states that children who work are responsible for their own taxes. Since mother has sole custody, she let him work, and she didn't instruct his employer (stepdad) to withhold any taxes, I think she should have to deal with making sure he pays. She obviously had this planned - letting him work and not withholding taxes - thinking that father would be stuck paying them...  you know, as a "punishment" for being able to claim him as a dependent.

Your thoughts please?

tidbit

[My life has been crazier than a work of fiction.....who'da believed?]

The stepfather chose to do a 1099 misc rather than doing a W-2 because it is not common to take the taxes out of an independent contractor's wages. Only independent contractors get 1099s. HOWEVER -- he probably doesn't meet the legal definition of independent contractor according to the IRS, because part of it is that they work with little or no supervision and exercise a great deal of independence.....the govt' had a big stink about just this type of thing a while back. Calling them 1099 contractors simplifies it for the employer but more importantly exempts the employer form picking up the tab if the person is hurt at work. In other words, if they call him a 1099 and he falls on the site, he is responsible for his own medical bills rather than being covered by workmen's comp.

If this were MY son, I'd be calling the state and asking if paying him as an independent contractor rather than paying his workmen's comp and social security is legal at his age. I don't really think it is.

Not sure that this answers your question? But maybe it helps with the big picture? Although.......you are a smart cookie, my guess is you already saw the crumbs, hahahaha.

3kidsmom

My hubby said he didn't think that it was legal for him to be getting a 1099 for what he was doing - and at age 14, so we will be calling about that. He was not an "independent contractor"..   he worked during the summer breaking down boxes and boxing up/moving boxes of some kind of heart pill (Nitroglycerin Sublingual Tablets). What would happen, would the company be fined or something for doing that?

As far as the actual taxes, I guess what I was trying to ask is ...  is there any way that the irs will come after OUR taxes in order to pay the kid's taxes since we are claiming him as an exemption?

tidbit

[My life has been crazier than a work of fiction.....who'da believed?]

You're dealing with the IRS here........I'd report the situation to them, call their help line and ask if you have to pay it or if the person who let him work there during the summer does.

Or you could just ignore the whole thing.....many times they don't cross reference this stuff for a while, you could fight it out with the state and this company in the meantime.

If it were me in this situaiton I think I'd be calling all the regulatory agencies I could and if I had to pay the kiddo's taxes, I would.....but the reality is that the company is in the wrong because a) he wasn't a contractor and b) he never had an opportunity to do a W4 and decide how to handle his taxes.

If I ended up paying the taxes, I would......but I'd sure get my money's worth, if you get my drift.

3kidsmom

We will   


Thank you!!

tidbit

I called the department of labor today. They told me that it was an IRS issue and that I just needed to call the IRS. Maybe the girl didn’t know what she was talking about, or maybe I am not calling the correct place.
Would the DOL not regulate these sort of things and get involved?

I talked to the IRS as well. They said there would be no way that hubby would be held responsible for kid’s taxes unless hubby signs the kid’s tax return.  They said that us claiming him as a dependent and the kid paying taxes were no way related.

tidbit

[My life has been crazier than a work of fiction.....who'da believed?]

call the DOL back and this time do NOT mention the letters "IRS" or the word 'taxes'. Instead, write down the name of the person you talk to and say you want to file a complaint because your child worked for a company and you found out that they didn't pay into social security and that he was told that if he got hurt, he wouldn't get workmen's comp because they dont' pay workmen's comp insurance to the state.

3kidsmom

Okay thanks I'll try that.

tidbit