topic Hire kid to work in home office in Business & farm

Hire kid to work in home office

wubeibei — Wed, 13 Nov 2024 22:02:07 GMT

My husband is a sole proprietor in CA. He hired our 13-year-old son to work at his home office and started paying him with personal checks. Do we need to submit any forms to IRS to report this wage? How do we send a W2 form to our son at the end of the year?

Re: Hire kid to work in home office

quorumof1 — Wed, 13 Nov 2024 22:22:48 GMT

Hi There

Hiring a relative to work in your business is allowable as long as the duties are ordinary and necessary for the business function. From a burden of proof aspect, the child should submit a time sheet as evidence of hours worked and duties performed to the business. From there corresponding pay should equal fair market value of service rendered.

A payroll service can prepare all necessary employment tax forms and W2, or you can manually prepare employment tax forms. See Link below:

Employment Tax Forms

Also your state of business operation might also need employment tax forms. Please see state website for more information.

Also wages reported to your child might require a tax return for the child.

who-needs-to-file-a-tax-return

For delivery, since child and business occupy same general location. You can leave the W2 at the business office for the child.

Re: Hire kid to work in home office

AmitaR — Wed, 13 Nov 2024 22:21:51 GMT

Hello wubeibei,

Yes, it is a good tax saving strategy to hire kids. Yes, you would need to issue a W-2 and send a copy to IRS as well.

You could use this software to generate and file W-2's:

Quick Employer Forms

Here is an IRS article with additional info:

Family Employees

Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful!

Have an amazing day.

AR (CPA 10+ years)