If DC1 had been paid W2 income as a regular employer, there wouldn’t be any taxes because the government would have taken out Medicare and Social Security and apparently the limit for having to file taxes as a dependent is like $13K, give or take. But zie was paid as a 1099 contractor, so zie did have to pay to make up for that.
Total tax amount turned out to be around 14% of income, so zie owed $326.
We decided it would be easier just to pay it ourselves than to figure out how to get hir to pay it given zie doesn’t have a checkbook.
Grumpy Rumblings (of the formerly untenured) 
March 13, 2023 at 4:49 am
Self employment tax rears its ugly head.
March 13, 2023 at 4:56 am
I mean, Medicare and social security are important so I can’t complain.
March 13, 2023 at 5:04 am
I get angry when people are paid as independent contractors when they are really employees just so the bosses don’t have to pay employment taxes and workers comp. It’s not as common as it used to be, thank heavens. But people like Uber drivers are often gobsmacked when they realize how little they actually made after taxes.
March 13, 2023 at 5:25 am
Fortunately we knew what DC1 was getting into and were just happy it was paid and shocked it was a high hourly wage. No complaints here.
March 13, 2023 at 7:55 am
When I was in college and tried to open a checking account, they told me “checking accounts are for adults.” (Admittedly, I looked twelve.) I thought to myself, “But I have to write checks!” So I went to the second-closest bank to my college (where I lived on campus) and got a checking account there.
I remember also signing over my parents’ checks to my friends in later years and letting them write my checks for me, I’m thinking because the bank had raised its rates. Bleh. I love my modern credit unions so much more.
Income taxes–the part of adulthood people do not look foward to! Even though you don’t have to be an adult to pay them!
March 13, 2023 at 9:25 am
Oh, I’m glad you posted, come to think of it I’m sure my DC is similarly situated (job = intermittent household tasks for neighbor, so appropriately an IC). Honestly I might not have worried about it (in spite of believing in funding Social Security and Medicare), but given the funding of the Roth, paying taxes on the earned income seems important.
March 13, 2023 at 9:38 am
Glad to be helpful!
March 13, 2023 at 11:11 am
Bogart– I’ve been a 1099-only person since the early 2000s. For a couple of years, I also paid a nanny as a W2-receiving household employee.
Knowing the process for my own self-employment income, as well as the hoops I had to jump through when I had the nanny… I would say to look into whether or not your kid’s income has to be reported. Household employees operate in a different tax space than those who operate in different settings, and I think that teenagers who act as household employees are also considered differently from adults who do so. Your kid may be exempt, which would give you an out for documentation/other requirements.
If your kid isn’t exempt or wants to report the income anyway, don’t stop at thinking only about your kid’s documentation and tax forms. Figure out if your neighbor is going to have any reporting requirements and let them know if they do. Every tax thing I do has an employer’s side/employee’s side reporting requirement; I’m not sure if it would be different in your kid’s situation.