This is a 2021 tax question.
Since January, 2021, parents pay a minor teenaged son to babysit his permanently disabled younger sibling in their own home for a few hours each week. He is being paid in cash at the end of each month. However, there is no formal agreement of employment here.
Minor also began a part-time job outside the home in October, 2021, and the employer / business will likely be issuing a W-2 at the end of the year. Business pays minor via direct deposit.
1. How do parents determine if the minor "provided more than half his own support for the year"? Minor lives at home full-time with both parents and attends high school. His income is usually spent on his wants & needs, such as electronic games, clothes, movie nights out with friends etc.
2. Do parents need to withhold any taxes and issue a W-2?
Minor has a projected combined income of around $7000 between both jobs for the year - likely to be around $5500 from the year-long babysitting job and likely $1500 from the outside job since October. We will only know final income numbers on Jan 1, 2022.
3. Should he file his own taxes? If he opens a Roth IRA for 2021, would he be required to file his own taxes?
Thank you very for your advice you can give us.
