<p>I didn’t say puting money in the parents account is fraudulant. I said the money is hers, and belongs in her account. There is a difference. For those who are putting money in their kids account for their use, you do so because you are providing their support. The same applies when it is the other way around. If the amount you are providing to a parent is more than their own income, you are supporting them, and they may qualify as dependents on your tax return.</p>
<p>The legal issue with puting her money in a parent’s account is gift tax. We’re not really talking about a large amount if this is just a part time job. But if it is a large amount saved over time, it could become a problem. </p>
<p>The other legal/tax problem - again if she earns enough money - is whether she is a dependent or not. If she spends down a $10,000 trust fund, and your household income is $25,000, she might be providing more than half of her own support. If that happens, you lose her as a dependent, along with all associated tax breaks.</p>
<p>There will be a record of her earning this money, about $6,000 of which will be protected. After that, she is expected to contribute 50% of her earnings. She is also expected to contribute 20% of her savings. That does not come out to 80% over the 4 years, but closer to about 60%. Not unreasonable, and that’s assuming that they money is used for nothing else. As DRCourages asays, you’re not going to save her all that much, so why put so much effort into it? At some point she will need a checking account in her name, why can’t it be this one?</p>