topic sole proprietor LLC expenses deduction in Self employed

sole proprietor LLC expenses deduction

Rayson — Wed, 27 Oct 2021 17:57:21 GMT

I have an LLC and I am a sole proprietor. My wife helps me with administrative tasks and I have been paying her regularly for the work. How do I go about showing this expenses during tax filing ? what form etc.

Also, my son(<18 years old) sometimes helps me with small jobs and I have paid him accordingly. How would I show this expense during tax filing? what form etc.?

Re: sole proprietor LLC expenses deduction

conniem123 — Wed, 27 Oct 2021 18:32:03 GMT

Contract labor includes payments to persons you do not treat as employees for services performed for your trade or business. You must file Form 1099-NEC to report contract labor payments of $600 or
more during the year.

https://www.irs.gov/forms-pubs/about-form-1099-nec

This expense is tax deductible on your Schedule C, Contract Labor.

If you pay them as employees, and withhold taxes, and submit payroll taxes, then you would provide them with Form W2.

I hope you find this information helpful!

Re: sole proprietor LLC expenses deduction

VolvoGirl — Wed, 27 Oct 2021 18:35:09 GMT

And if you pay them as independent contractors they will have to fill out a Schedule C in their own tax returns to report it. So if you file a Joint return your wife will have her own Schedule C also.

On your Schedule C you report it on line 11 for contract labor.