<p>If I understand you correctly, your daughter is going to be paid on a Form 1099 instead of a W-2. This is advantageous to the employer because they don’t have to pay social security, etc. for your daughter; instead, your daughter will be responsible for paying her own “self employment” taxes–so make sure she puts aside about 1/3 of what she makes for tax time next year, unless she truly makes a really small amount. Also, make sure she keeps track of any expenses she incurs in connection to the work, from an investment in a computer program to mileage on the car to go to appointments, etc.</p>
<p>Be very careful with “expenses”: if the software she gets is going to be used for something else in addition to the business, then its cost cannot be fully deducted. Taxes- One third set aside seems to be a bit high. </p>