Sole Proprietor with child working with me.

[utlord85]

California
I have been paying my son bi-weekly by check without him being an employee on payroll. Unfortunately, a previous owner told us all he did was 1099 his kid. However, we are not sure that's true. We talked about him getting his business License so he can get his own jobs, but he didn't do it in 2015 and still has yet to in 2016. Now that I/He has to pay taxes for 2015, what should I file so that I can get him the proper paper for him to do his taxes for 2015?

 

[tranquility]

The real answer is complex, for many reasons. Not all of them have to deal with taxes. If you have a federal ID number, I might just go the whole way and issue him a W-2 and pay out accordingly. I know we have some clients that do that for their children's "work" each year that just happens to result in a net amount where they can pay the max into an IRA.

A 1099, while probably not a problem with the IRS, could cause other issues like the need for a business license that you mentioned.

Yes, the regulations are complex and a hassle. It's almost like the government discourages people having others do work for them.

 

[Zigner]

Is your child a minor?