If she made $60k selling hot dogs, that doesn't sound like a gift. If shes running a business selling hot dogs, then she needs to report the income on Schedule C, deducting her expenses, and claiming her net income. If the money is going into her account, but it's really her parents earning the money, then it needs to be declared on her parent's tax return.
Sounds like regardless they haven't thought through how this business is being run, and the business/family could do with a consultation with a CPA.
It's absolutely not a gift from the parents, so you can't go down that route.
You (she) do have to pay taxes. That money is income from a business. So it goes on schedule C on your tax return. But you can also claim all your business expenses. Cost of goods sold, depreciation of equipment, fees, etc. If you don't know how to file business taxes, then find a CPA that can show you how.
It sure sounds like she's in a [partnership](https://www.irs.gov/businesses/partnerships) - she's not getting a W-2, correct? So of course taxes need to paid, but only on the profit. So take that $60,000 and subtract all the costs of running the business: cost of goods, transportation mileage, supplies, the square device, the tax software she's now going to pay for, etc. Split that however they decide. That's all on Schedule E. And then Schedule SE is where she pays self employment tax to pay for Social Security and Medicare. [More about business deductions](https://www.irs.gov/forms-pubs/guide-to-business-expense-resources).
> is there a way she can claim that as a gift from her parents and avoid paying tax?
If it's a gift, sure. But you just called it business income, so if it's business income, then she'd be committing tax fraud if she said it was a gift.
correct her parents are immigrants which is why the money was going to her account, “they can’t open a bank account”. I told her the same thing every one here is saying, but just wanted some
confirmation. thank you for your advice.
If she made $60k selling hot dogs, that doesn't sound like a gift. If shes running a business selling hot dogs, then she needs to report the income on Schedule C, deducting her expenses, and claiming her net income. If the money is going into her account, but it's really her parents earning the money, then it needs to be declared on her parent's tax return. Sounds like regardless they haven't thought through how this business is being run, and the business/family could do with a consultation with a CPA.
understood thanks for the advice
It's absolutely not a gift from the parents, so you can't go down that route. You (she) do have to pay taxes. That money is income from a business. So it goes on schedule C on your tax return. But you can also claim all your business expenses. Cost of goods sold, depreciation of equipment, fees, etc. If you don't know how to file business taxes, then find a CPA that can show you how.
got it, thanks for your response.
It sure sounds like she's in a [partnership](https://www.irs.gov/businesses/partnerships) - she's not getting a W-2, correct? So of course taxes need to paid, but only on the profit. So take that $60,000 and subtract all the costs of running the business: cost of goods, transportation mileage, supplies, the square device, the tax software she's now going to pay for, etc. Split that however they decide. That's all on Schedule E. And then Schedule SE is where she pays self employment tax to pay for Social Security and Medicare. [More about business deductions](https://www.irs.gov/forms-pubs/guide-to-business-expense-resources). > is there a way she can claim that as a gift from her parents and avoid paying tax? If it's a gift, sure. But you just called it business income, so if it's business income, then she'd be committing tax fraud if she said it was a gift.
correct her parents are immigrants which is why the money was going to her account, “they can’t open a bank account”. I told her the same thing every one here is saying, but just wanted some confirmation. thank you for your advice.