Results 1 to 6 of 6

Thread: putting kids on payroll

  1. #1
    Member Array
    Join Date
    Jan 2017
    Posts
    2
    Likes (Given)
    0
    Likes (Received)
    0

    Default putting kids on payroll

    I would like to put kids on payroll and give them a salary of 6k.
    Where do i take the deduction, is it on 1120s or schedule C.

    I have setup sole prop and will be paying the kids using this bank account.
    Do i need to open a separate bank account for the kids to deposit their salary.
    How can the money be withdrawn, Should i open a Roth IRA.
    What are my options.

  2. #2
    Discount Prodigy Array Owen's Avatar
    Join Date
    Mar 2014
    Location
    Localhost
    Posts
    685
    Likes (Given)
    18
    Likes (Received)
    70

    Default

    Quote Originally Posted by jackbrown100 View Post
    I would like to put kids on payroll and give them a salary of 6k.
    Where do i take the deduction, is it on 1120s or schedule C.

    I have setup sole prop and will be paying the kids using this bank account.
    Do i need to open a separate bank account for the kids to deposit their salary.
    How can the money be withdrawn, Should i open a Roth IRA.
    What are my options.
    I would recommend having a separate account for payroll. You don't need a Roth IRA, that's for retirement.

  3. #3
    Member Needs New Keyboard Array
    Join Date
    Feb 2013
    Location
    Ontario, Canada
    Posts
    1,189
    Likes (Given)
    113
    Likes (Received)
    231

    Default

    What type of business do you have and what kind of work would the kids be doing?
    Brad Miedema
    Fulcrum Saw & Tool

  4. #4
    Member Array
    Join Date
    Jan 2017
    Posts
    2
    Likes (Given)
    0
    Likes (Received)
    0

    Default

    Quote Originally Posted by Fulcrum View Post
    What type of business do you have and what kind of work would the kids be doing?
    I have a work from home software consultancy business and the kids will be helping me in chores for the home business

  5. #5
    Member Needs New Keyboard Array tallen's Avatar
    Join Date
    Dec 2012
    Location
    New Hampshire & Maine
    Posts
    483
    Likes (Given)
    30
    Likes (Received)
    98

    Default

    If you are a sole proprietor then you would not be filing an 1120s, but a schedule C. You will nonetheless need to get an EIN distinct from your SSN when you become an employer. You will also need to register with your State Department of Labor. You will likely have to file quarterly 941's and an annual 940 (and you will likely want to set up an account on the EFTPS.gov site in order to make your deposits), as well as preparing W-2's and filing a W-3 (the last two you can do through a Business Online Services account with the the Social Security Administration). Your state will likely have similar filing requirements. They are also the enforcers of the rules around the employment of minors, so be sure you are familiar with those rules as well (e.g. the kids may need to get permission from the superintendent of schools before they can start working, as just one example). You'll have to post all the required labor posters somewhere the kids will see them. Welcome to becoming an employer, and congratulations on joining the ranks of "job creator!"

  6. #6
    Member Needs New Keyboard Array tallen's Avatar
    Join Date
    Dec 2012
    Location
    New Hampshire & Maine
    Posts
    483
    Likes (Given)
    30
    Likes (Received)
    98

    Default

    One other thought, youi'll want to make sure to file waivers with the Worker's Compensation Board of your state so that you don't have to carry the kids on your worker's compensation insurance, assuming they are blood relatives of the company owner.... and assuming your state has such a provision to waive coverage ...

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •