Don't forget to check if she needs to pay state income tax in the state where she's working! Federal exempt status doesn't automatically mean state exempt. Some states have much lower thresholds for taxation.

Great question! I went through this exact situation with my college-age son last year. The key thing to remember is that being claimed as a dependent doesn't automatically disqualify your daughter from claiming exempt status on her W-4 - it just changes how her standard deduction is calculated. As others have mentioned, for dependents in 2025, the standard deduction is the greater of $1,250 or earned income plus $400 (but capped at the regular standard deduction of $14,600). With her expected $6,700 in earnings, her standard deduction would be $7,100. One additional tip: make sure she keeps good records of her actual earnings throughout the summer. If she ends up making significantly more than expected and goes over that $7,100 threshold, she might owe some tax even though she claimed exempt. In that case, she'd need to make quarterly estimated payments or face potential penalties. Also, don't forget about FICA taxes (Social Security and Medicare) - those will still be withheld from her paychecks regardless of her exempt status, since exempt only applies to federal income tax withholding.

Just want to add that if the person absolutely refuses to provide their SSN and you still pay them anyway, YOUR ORGANIZATION will be responsible for the backup withholding (24% of what you paid them). And the IRS can assess penalties for failure to obtain a W-9!!! I learned this the hard way with our arts nonprofit. We were fined $250 per missing W-9 during an audit. Plus we had to pay the backup withholding we should have collected. Totaly wiped out our small reserve fund.

Based on my experience with our local community center's nonprofit, I'd strongly recommend being very clear with your media person about why you need their SSN and what protections are in place. Many people don't realize that the W-9 form they're completing stays with your organization - it's not sent to the IRS. You might also explain that this is a standard business practice for any organization paying contractors over $600, not just nonprofits. Sometimes framing it as "this is what every business does" rather than "the IRS requires this" makes people more comfortable. If they're still hesitant, you could offer to show them your organization's data security policies or explain how you store and protect sensitive information. We found that transparency about our processes helped reluctant contractors feel more confident about sharing their information. One last suggestion - if the promotional work might extend beyond this year, make sure you're tracking payments by calendar year, not by project. You could potentially split the work across two calendar years to stay under the $600 threshold if that makes sense for your timeline.

I went through this exact situation with my dissolved LLC in 2021. The key thing to understand is that the IRS requires a final return even with zero activity - it's how they officially close your business account in their system. Here's what you need to do: 1. File Form 1065 for 2020 with all zeros but check the "Final Return" box at the top 2. Include Schedule K-1s for both members marked as final returns 3. Attach a statement explaining the business was dissolved in 2020 with the dissolution date For penalties, you definitely have grounds for reasonable cause abatement since you genuinely misunderstood the filing requirements. When you file, include a detailed letter explaining that you read the instructions and believed no filing was required due to zero activity. Reference IRC Section 6651(a)(1) and cite "reasonable cause and not due to willful neglect." The IRS agent's suggestion about amending 2019 doesn't make sense - you need the final return for the actual year of dissolution. I successfully got my penalties waived using this approach, so don't panic about the late filing fees.

I had a very similar situation with my dissolved partnership and want to share what worked for me. Like you, I thought no filing was needed for a year with zero activity, but learned the hard way that the IRS still requires that final return. Here's the exact process I followed that got my penalties fully waived: 1. Filed Form 1065 for the dissolution year with all financial lines showing zeros 2. Checked the "Final Return" box prominently at the top of Form 1065 3. Prepared Schedule K-1s for each partner marked as "Final K-1" 4. Included a separate statement with the business name, EIN, and exact dissolution date For the penalty abatement, I wrote a detailed reasonable cause letter explaining that I had carefully read the Form 1065 instructions and genuinely believed no return was required when there was no income, expenses, or business activity. I emphasized that this was an honest misunderstanding of the tax code, not willful neglect. The IRS accepted my explanation and waived all penalties (which would have been over $2,000). The key is being thorough in your documentation and showing you made a good faith effort to comply based on your understanding of the rules. Don't let that IRS rep confuse you about amending 2019 - you definitely need to file the 2020 return as your final return since that's when you actually dissolved. Good luck!

Has anyone had the IRS make the same mistake again after filing the 941-X? We had a similar situation in 2022 and even after submitting the correction, they made the exact same data entry error again the following quarter. wondering if this is a systemic issue with certain employer accounts.

This exact same thing happened to my business last year! The IRS transcribed my Q3 941 wages as $45,000 instead of $450,000 - apparently someone missed a zero during data entry. Got a CP134R refund for over $12,000 that I knew was wrong. What made it even more frustrating was that I e-filed through my payroll software, so there shouldn't have been any manual transcription errors at all. Turns out their system had a glitch that corrupted some electronically filed returns during processing. The 941-X process you're going through is correct, but make sure to explicitly state in Part 4 that this is correcting an IRS processing error, not your filing error. I also recommend calling the Practitioner Priority Service line (if you have a tax pro) since they tend to be more knowledgeable about these systematic processing issues. Regular customer service agents often don't understand how these transcription errors happen in the first place. Keep detailed records of everything - this type of error sometimes repeats itself in their system even after correction.

Just want to add another important point - make sure you're tracking your mileage properly! Since you're driving between different apartment properties for cleaning, you can deduct business mileage at the current IRS rate (67 cents per mile for 2024). Keep a simple log in your car or use a mileage tracking app. Write down the date, starting location, ending location, business purpose, and total miles. This can add up to significant deductions over the year - if you're driving 50 miles per week for cleaning jobs, that's about $1,700 in deductions annually. Also, don't forget you can deduct things like liability insurance if you get it for your cleaning business, and even a portion of your cell phone bill if you use it to communicate with clients. The key is documentation - keep everything organized from day one!

Great question! As someone who's been in a similar situation, I'd strongly recommend getting professional help to make sure you're doing everything correctly. With $6,500/month in income, you're definitely in self-employment territory and will need to handle quarterly estimated taxes. A few key things to add to the excellent advice already given: 1) Consider getting an EIN (Employer Identification Number) from the IRS - it's free and makes you look more professional when dealing with clients who need to send you 1099s 2) Look into business liability insurance if you haven't already - it's usually pretty affordable for cleaning services and protects you if something gets damaged 3) Keep a dedicated calendar or log of all your cleaning appointments - this helps with mileage tracking and proves the business purpose of your expenses 4) Consider whether you want to charge sales tax (varies by state) - some states require it for cleaning services The quarterly payments might seem overwhelming, but they're actually a blessing in disguise. Paying as you go prevents that massive tax shock in April that catches a lot of new self-employed people off guard. You've got a solid income stream here, so getting the tax side organized properly will give you peace of mind to focus on growing your business!