NateTheGrEAt
Employee Tax Expert

Business & farm

Yes, if you are not familiar with payroll I would recommend consulting an accountant or consultant that can assist you in this area, either by doing the proper filings for you, or teaching you how to do them yourself. 

 

If you hire employees you will need to have the employees complete a W4 and will need to file a quarterly 941 along with an annual 940. The forms are not necessarily complex, but it would benefit you to have someone experienced to ensure you know what to file and where/when. You didn't mention what state you are in, but if it has a state income tax, you would also need to confirm whether any state withholdings or filings are required. There could be other state-specific issues as some states have required filings for state unemployment, paid family leave, or other state or local taxes/benefits. A knowledgeable accountant or bookkeeper in your area should be familiar with what is necessary. 

 

Since you would be employing family members, be sure that whoever you hire to assist with this is familiar with Chapter 3 of the IRS Employers' Tax Guide on family employees. Depending on ages and relationships there may be some taxes you do not have to pay. 

 

If you are only planning on paying your children a small amount of money (appropriate for the work a child would be doing), such that they earn a total of less than $14,600 of total wages in 2024 - and they don't have other jobs that would push them over the $14,600 total income level - and they don't have any unearned income (such as interest or investments) - then the children could claim EXEMPT on their W4 as they will have no tax liability and do not need to have anything withheld for income tax. This would potentially enable the children not to have to file a tax return as their income would be below the filing threshold and they would have no withholding that needs to be refunded. 

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