@2793933 wrote:
I'm paying myself a salary
my wife began helping with the business, she's involved in keeping financial records, answering phone calls and marketing ... should I make her and employee of the business? or should she become a 1099 employee?
You aren't paying yourself wages and filing employer forms, are you? A Sole Proprietor can not be receiving "wages" that would show up on a W-2. As was noted above, your income is the full profit of the business.
As for your wife, IF you do anything, most likely she would be an employee (W-2), not an Independent Contractor (1099). But hiring an employee is a lot of work and expense (payroll forms, unemployment compensation, worker's compensation, etc.).
Sitting down face-to-face with a tax professional that can analyze the entire situation may be a good idea.
