If there were wages paid to your child, you can deduct those wages as one of your business expenses in the Business Income and Expense section of TurboTax self-employed (there should be a line labeled Wages or payroll). This is all you need to do in regards to your child's wages on the tax return.
There are some rules to keep in mind if your are paying your child a wage in your business:
- Your child needs to be performing a useful function to your business. You can't pay your child to do household chores.
- You don't need to withhold social security and medicare tax if your business is a sole proprietorship or a partnership where both parents make up all the partners in the business for wages to your children who are under 18.
- You need to provide your children with W-2s.
- You must maintain documentation to prove the hourly rate paid, the number of hours worked, and the amount earned during each payroll period in the event of an audit by the IRS.
Inventory / Cost of Goods Sold
Inventory and Cost of Goods Sold
Every day expenses conducting business
Business Vehicle Expense
Other Common Business Expenses
Home Office Expense
I have NO inventory or COGS, I just need to reflect salary paid to my household member who assisted me in consulting services. Where and how can should I enter this?
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