|
Posted by Marion1E on February 25, 2007, 5:19 am
Please log in for more thread options
I paid my children a small wage to help me in my business.
How do I enter the fact that these are non-taxable wages on
the W2. Does it go into box 14--notaxable I? Any help is
appreciated.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
|
|
Posted by Phil Marti on February 26, 2007, 1:13 am
Please log in for more thread options
> I paid my children a small wage to help me in my business.
> How do I enter the fact that these are non-taxable wages on
> the W2.
They are exempt from employment tax (assuming you meet the
requirements), but not exempt from income tax, even if they
didn't earn enough to actually pay any income tax. Gross
wages go in box 1. Zeros in boxes 3 through 6 indicate the
exemption.
--
Phil Marti
Clarksburg, MD
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
|
|
Posted by Paul Thomas, CPA on February 26, 2007, 1:13 am
Please log in for more thread options
> I paid my children a small wage to help me in my business.
> How do I enter the fact that these are non-taxable wages on
> the W2. Does it go into box 14--notaxable I? Any help is
> appreciated.
They go in Box 1 of the W-2.
--
Paul Thomas, CPA
paulthomascpapc@bellsouth.net
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
|
|
Posted by Bill Brown on February 26, 2007, 1:32 am
Please log in for more thread options Mario...@comcast.net wrote:
> I paid my children a small wage to help me in my business.
> How do I enter the fact that these are non-taxable wages on
> the W2. Does it go into box 14--notaxable I? Any help is
> appreciated.
The wages are not non-taxable. If your children are under
age 19, their wages are not subject to FICA withholding or
matching by you, the employer. That would mean zero in the
FICA and Medicare wages boxes.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
|
|
Posted by shedges on February 26, 2007, 1:32 am
Please log in for more thread options If they are YOUR children (natural or adopted), and under
the age of 18, their income is exempt from FICA W/H, exempt
from the company match of FICA and exempt from FUTA and
usually SUTA taxes. Once they turn 18, the next pay, all
that stuff kicks in.
Their earnings are considered gross income, its just not
taxed for Soc Sec or Unemployment. On the W-2, enter the
total wages in Box 1. If there was Fed W/H, enter that in
Box 2, and if none, enter "-0-" . Then enter "-0-" in Box 3
and Box 5 for Medicare and Soc Sec wages. Usually, the Box 1
amount goes in Boxes 17 and 19 as state and local gross
income. That's it. You'll need a W-3.
Paying a child is a great tax planning tool, as they can
then open an traditional IRA and exclude all the income up
to the $4000 limit, and still learn about savings and tax
planning. If you pay them more, they can spend their own
money, rather than asking for an allowance, and it is tax
deductible on your Sch C, reducing your income tax and your
soc sec tax. You must be able to justify the pay rate and
hours worked if the IRS asks, and it must be reasonable, and
ordinary and necessary ... such as taking out trash,
cleaning, answering the phone, filing transcribing phone
messages, handling internet requests, designing websites and
updating them ..... etc. You know your kids can do this,
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
|
| Similar Threads | Posted | | Re: LLC benefits (going from Sole Proprietor) | October 24, 2006, 7:08 am |
| Re: LLC benefits (going from Sole Proprietor) | October 24, 2006, 7:08 am |
| Re: LLC benefits (going from Sole Proprietor) | October 24, 2006, 7:08 am |
| Sole Proprietor Question | January 12, 2007, 7:12 am |
| Changing Tax status from sole proprietor to S-Corporation | January 10, 2008, 11:03 am |
| hiring own children in sole proprietary business | March 3, 2007, 5:07 am |
| Sole Proprietorship... 1099 | October 24, 2006, 7:27 am |
| Issuing a 1099 to your children for tuition | February 28, 2008, 10:31 am |
| pre-tax dependent care limit for 2 children | June 8, 2006, 3:01 pm |
| Children May Now be Treated As Dependent of BOTH Parents. | August 19, 2008, 10:13 am |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap