dual w-2 and 1040ES for household employees

[barry29]

I have a situation where I pay household employees (to care for elderly MIL), and may need to use 2 payroll vendors in the same year.
Both would pay some estimated employment taxes to the IRS, would both would pay our employees regular, payroll, Medicare, SS taxes as well.
The existing vendor issued our employees w-2 and estimated taxes to use last year to help us do our 1040 Schedule H.
End of this year we'd have both vendors issue w-2 to employees and send their own estimated tax payments on our behalf to state/federal govts. So employees would get dual w-2 from same employer just because of a systems issue on our end, and we'd have 2 sets of estimated payments to consolidate to our schedule H. I would be very beneficial to NOT wait for end of the year to start using the new payroll vendor, and maybe even continue using both next year (each would pay a portion of the payroll possibly to same employees to continue dual w-2 the following year).

Anyone see were this dual issuance of W-2 to employees (or schedule H ES payments) would cause employees or employer any tax problems ?

Thanks for sharing if you have had experience with this.

[Critter-3]

If you paid the employees thru a payroll company and W-2 forms were issued    then you DO NOT also file a Sch H on the tax return unless you like paying the taxes twice.  

And you will not issue 2 W-2 forms to each employee  ... the partial year payroll info will be transferred to the new payroll company and incorporated into their system and a single W-2 form for the entire year's  payroll will be issued by the second payroll company at the end of the year. 

[barry29]

Thanks but this does not address my question.

I received schedule H of course, do not create one, I know that.

I specifically said I may have a  reason to have 2 payroll providers overlapping for an extended period of time.

If each does not get data from the other, then there would be no consolidation of data to create a single W-2 nor single schedule H.  Each would pay their own estimated payments for payroll tax etc.  Each would send their own w-2 and schedule H if they are unaware of the existence of the other.

So is there any serious problem that makes this difficult or impossible if I do NOT want to transmit the data to a the new provider but use each for slightly different purposes.  I have my reasons, but if this is very problematic then  need to see if I can find one payroll vendor that can handle 2 very different needs to avoid ongoing dual payroll vendors and tax filings.

[grethe]

Sounds to me like you just want to make trouble for yourself.  Aren't the filings and taxes enough trouble already?

[Critter-3]

Ok  ... talk to the payroll companies and discuss how the annual filing requirements will be handled but as to the Sch H ... you do NOT need to enter it on the tax return if you have already paid the payroll taxes thru the payroll companies even if they give you a Sch H (for whatever reason they would).  

[barry29]

Not helpful grethe.

I decided NOT to give my reasons to have 2  payroll vendors as my reasons are not what I want to discuss.  Would get the thread off track in a different subject.  Just want to know what would be the problem for employer if they received 2 w-2 from same employer ?  People get multiple w-2 all the time if they have multiple employers, but this does seem different.

[barry29]

The only reason my 95 year old inlaw would file tax returns is because she is an employer and needs to ensure proper payroll tax is paid.   Her income is very low and otherwise was able to skip filing often before becoming an employer last year. 

I am also concerned about the employees.

[Critter-3]

Ok ... if she has no other reason to file a return then she doen't need to do so now to file a Sch H when the payroll taxes are being paid thru a payroll company.  She has NO business income/expenses  to report  and  if she does file a return this would be a Sch A deduction if this is for medical expenses.  Again no Sch H is required to pay the payroll taxes if they were ALREADY being paid by filing proper  payroll tax returns ... forms 940, 941, state unemployment and W-2/W-3 forms.  

[barry29]

Thank you.

Yeah, home aides, no business income.

Retiree with only SS income at this point.

Was hoping to avoid filing taxes for her.

So the outstanding issue is that we really need to try to consolidate to a single payroll provider that can file for us and send a single w-2 to the home aides. There is a gap in what our current provider can do, and not sure other specialized providers can do what we need either.  So need to see if they can work together so one of them can consolidate taxes to continue to do the filings for her.    I would hate to have the payroll providers stop filing for us and have to consolidate and do it myself, which seems like a possible but undesirable solution if I pay same person different portions of comp on different payroll systems.  Hopefully there is one I can migrate to, have to look.

[Critter-3]

OK ... STOP OVERTHINKING THIS ...  if her only income is SS benefits then she has no reason to file an INCOME tax return.  If the home health aides are being paid thru a payroll company then the payroll taxes are already being handled so there is NO REASON to file a Sch H at all even if the payroll company was kind enough to give you one filled in ... that info is NOT sent to the IRS thus she has no need to file anything herself.  

As to the multiple payroll companies ... it is not unusual to have more than one in a single tax year so if the last company you use  will not combine the info for the required forms then you can get the paper forms from the IRS and manually fill them in yourself.  Please talk to them afterall you are paying them for this service. 

[barry29]

STOP misreading people’s replies and making assumptions.   

You are basically repeating back to me portions of what  said as if I didn’t understand what or why i said it.  Why do you think I said she has only SS income ?

And you think I have not already called the payroll provider ?  What a terrible assumption to make about someone.  

1) Current payroll provider said they can’t provide me part of services we now need.

2) they suggested i speak to a new payroll provider

  The specialized payroll providers generally do not do all of what my current provider does…hence wondering if one can use both concurrently (not just transfer from one to other with ytd data).

3) Current provider  said they would be glad to connect me to an “HR consultant” to discuss the new needs (for a fee).  Thought maybe random strangers on the internet might be helpful instead.  I am spending someone else’s money, trying to not waste it (on consultants) if avoidable.

Seems to me the only way to use 2 providers is to have them pay but not file, and then consolidate and file myself.  The year end tax filing is a separately billed service from my existing payroll provider, which may not fully meet my needs going forward.  Seems I need to get one of the two to consolidate and file for me annually or find a new payroll provider who can replace the existing one completely (and do the one time ytd data conversion to file this year, or maybe wait to switch at year end but that is costly to wait).  Needs changed, had done homework and found many good providers who met our more common prior needs, but not additional need that arose.   Did not want to discuss payroll vendor selection process on TT board, not expecting such expertise here.  But the  tax filing part seems challenging to consolidate myself, yet at the moment have no vendor who can meet all my needs.

So I am not overthinking this.  I have a process that worked last year but no longer meets new needs, trying to find a solution and as yet have not found one.  Need to call more providers and maybe start over again since my own was not so helpful for this unique need that I do not want to discuss/debate here in detail.

[Critter-3]

Ok ... so you have a plan that will work ... let them do the week to week work then complete the year end forms yourself ... you can get them from the IRS for free in the mail ... you just have to order them in December (and order more than you need in case you make errors and have to start over). 

https://www.irs.gov/businesses/online-ordering-for-information-returns-and-employer-returns

[barry29]

So 2 vendors could make the "estimated" tax payments (they call it quarterly tax filing).

I can retrieve the amounts they paid, along with what was withheld from employees and paid to them,
to generate the W-2 for the employees and schedule H, consolidated across the two sources of payments.

And it would seem that if I do decide to file a return for her, TT can generate the W-2 for employees and file schedule H, no need to use the paper forms from IRS and make mistakes to start over again.  I have historically used TT online in last few years, but seems TT online can do the job.  I prefer the guidance than the direct forms usage.   

Thanks.