Real estate sales agent paying kids

[suren037]

hello, 

I am a real estate agent and dont have LLC, i get paid with 1099. My son helps me with my activities and i need to pay him for helping him. He is under 18 and I paid him less than standard deductions. Do i have to issue him 1099 or W2 or i can claim that deduction as expenses in my taxes. i heard kids dont need the forms (1099 or W2) if they are below 18 and paid less than standard deductions?

[Hal_Al]

Q. Do i have to issue him 1099 or W2?

A. W-2

Q. Can I claim that deduction as expenses in my taxes?

A. Yes, as long as the work is bonified. See reference below.

Q. I heard kids don't need the forms (1099 or W2) if they are below 18 and paid less than standard deductions?

A. They do need a W-2 or 1099-NEC.  The W-2 is much better.  What you probably heard is that  kids under 18, working in the family business, are not subject to FICA/FUTA (social security and Medicare tax). Issuing a W-2 is the way to document that. 

References:

https://www.taxslayer.com/blog/hiring-your-child-small-business-self-employed-taxes/

https://www.cpapracticeadvisor.com/2023/08/03/4-key-tax-benefits-of-hiring-your-children/92835/

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/children-as-employee/...

[suren037]

can i issue him W2 w/o having LLC?? I am myself on 1099. 

[Hal_Al]

Q. I am myself on 1099.  Can i issue him W2 w/o having LLC?

A. Yes. Being "on a 1099-NEC" means you file as a sole proprietor.  You file Schedule C as part of your tax return.  It's your "Schedule C business" that issues the W-2. You will have to get an EIN. 

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-forms/create-w-2-1099-forms-employee...

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/how-do-i-issue-my-minor-child-a-...