Get your taxes done using TurboTax

It depends.  Following is the rules for children who work for parents and spouses who work for the other spouse. 

1. Answered below.
2. TurboTax can help you create your W-2s and 1099s, but there is not a payroll system.
3. You cannot just assign the income to your spouse or child for last year.
4. The 401(k) will be a decision based on your income.
5. My advice would be to use TurboTax Online Premier or TurboTax Desktop. See TurboTax Products All of your types of income can be handled in TurboTax.
6. Answers are available all year around when request help here like you did today.

Family Employees

Employed in the parent’s sole proprietorship or a partnership in which each partner is a parent of the child:

• Payments for the services of a child are subject to income tax withholding regardless of age. (This would requires EIN for W-2 reporting)
• Payments for the services of a child under the age 18 are not subject to social security and Medicare taxes.
• Payments for the services of a child under age 21 are not subject to  FUTA tax.  If the child is 21 years or older, then payments for the services of a child are subject to FUTA taxes.

There are some rules to keep in mind if your are paying your child a wage in your business:

• Your child needs to be performing a useful function to your business. You can't pay your child to do household chores.
• You need to provide your children with W-2s.
• You must maintain documentation to prove the hourly rate paid, the number of hours worked, and the amount earned during each payroll period in the event of an audit by the IRS.
• How do I create W-2s and 1099sfor my employees or contractors using TurboTax?

Married Couples In Business

One spouse employed by another

If your spouse is your employee, not your partner, you must pay Social Security and Medicare taxes for them. The wages for the services of an individual who works for their spouse in a trade or business are subject to income tax withholding and Social Security and Medicare taxes, but not to FUTA tax. For more information, refer to Publication 15, Circular E, Employer Tax Guide.