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Dwayne B.
Dwayne B., Lawyer
Category: Employment Law
Satisfied Customers: 32154
Experience:  Employment Law Expert
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My question is: how do I report payment I give my son and

Customer Question

My question is: how do I report payment for money I give my son and pay taxes? He and I would both like for this to show as an income, and that taxes are paid.I have a sole proprietorship, that I set up years ago, when I did some photography work. It was set up as a for sales (no employees or withholding) and I haven't used it in a long time. I went to our state's dept of labor website and signed in to my account. In order to add 'withholding' I have to register a new code - and out of over 1,000 - I couldn't figure out what one to choose; none seemed appropriate for a parent that is trying to employ an adult child for maintenance of personal property.I may be making this more complicated. I also hire two other people and just pay them cash; a housekeeper and a lawnkeeper. I haven't ever given either a form to show how much I paid them yearly. They both come and work for me every other week, about 2-4 hrs is all. I may be letting them go, so my son will be doing those things also.The bot***** *****ne is, we want him to show that he has legitimate work, with taxes paid. I just don't know how to set it up, or pay the taxes due.Thank you.
Submitted: 4 months ago.
Category: Employment Law
Expert:  Patrick, Esq. replied 4 months ago.

Hello and thank you for entrusting me to assist you. My name is ***** ***** I will do everything I can to answer your question.

It would be very difficult and potentially open you up to a variety of legal issues if you were to retroactively claim money paid as employee wages. In short, a bad idea. The better approach would typically be to declare the money as payment made to an independent contractor. Unlike employees, for whom taxes are withheld, independent contractors simply receive the entirety of their earnings and pay taxes on it themselves at the end of the year. The employee gets a form 1099 and the employer submits a form 1096 to the IRS which summarizes the payments made on all 1099s.

I hope that you find this information helpful. Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

Customer: replied 4 months ago.
Let me try this again - let's forget the independent contractors I hire for house and yardwork. I want to know how to set myself up to pay taxes for an employee, my son. I want to pay everything I would owe from January 1st of this year. I understand there are penalties if not paid appropriately quarterly. I don't know what kind of 'business' I am, in order to set up my withholding taxes. The work done is to manage property for me - I don't well anything, or manage for other people. He does maintenance for me. We own a condo that is a nightly rental, we have a farm, and he also does personal home maintenance.
Expert:  Patrick, Esq. replied 4 months ago.

Thank you. ***** must opt out of this question in favor of other experts. Please do not respond to this message, as it will delay a response from someone else. Someone should be with you shortly. Very best regards ***** ***** for any inconvenience.

Expert:  Dwayne B. replied 4 months ago.

Different expert here.

Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Also, I can only answer the questions you specifically ask and based on the facts that you give so please be sure that you ask the questions you want to ask and provide all necessary facts. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

The first thing to do is get an Employer ID number (EIN) from the IRS. While you get them from the IRS, the KS stat website discusses these and provides a link to the IRS page at

The Kansas Dept of Labor also has an excellent website, much better than most states, that allows you to do everything through them, including paying the employment "taxes". That web page is

Using that website you can complete the Status Determination Report, K-CNS 010, apply for a state unemployment tax number, and report changes to your existing account, file your Quarterly Wage Report & Unemployment Tax Return, K-CNS 100. They will also provide publications to you explaining how to do all of these. They will also walk you through the process if you have any problems.

Other than these things I have set forth above, the only other issues are, first, what type of business do you want to have to pay the employee(s). I'm not sure how you are set up now but you can incorporate or form a partnership or you can operate as a sole proprietor. If you want to operate as a corporation or partnership then you need to draft and file the appropriate paperwork. You can do that by buying the forms and having them filled out at a website like this one or by hiring a local lawyer to handle the paperwork and then advise you on how to "act like a corporation". There are a number of reasons to use a corporation such as to avoid personal liability and also to cut down on taxes.

You also have to consider whether or not you want to carry workmen's compensation insurance. It is required of KS employers except for those in certain agricultural pursuits or those with a gross annual payroll of $20,000 or less. There is a web page that discusses this topic at

Customer: replied 4 months ago.
I already have an EIN. I have already accessed the KDOR; I have an account. I am asking - what 'type' of business do I need to get a code for, just be an employer, with no sales or management of any other property or employees other than my own? Currently, I am only set up on my sole proprietorship for "sales" with no employees. Now, I have no sales and one employee (or will have). There are over 1000 categories, and nothing that just states "property management" or "maintenance." The closest is a 531311 Residential Property Manager or 531312 Non Residential Property Manager. Once I figure out the appropriate code - I can proceed online. I am stumped by that - and don't want to do the wrong thing.
Expert:  Dwayne B. replied 4 months ago.

I'm sorry, there is extra info at the top of the page that wasn't there earlier and that explains what you just told me. I'm not sure why it wasn't showing up earlier.

Either of those will work and, realistically, this is the least important part of the process.

If other people live where he is working then he would be a REsidential property Manager (for instance, if he was working at an apartment complex). If, instead, the property is more long the lines of a department store or strip mall then it would be a non-residential property manager.

If you own a combination of the two and you don't want to pay him separately then the best way to designate him would be as a Residential Property Manager.

Customer: replied 4 months ago.
Okay - thank you Dwayne. It's just for us; working on our properties - our home, his home (we have a very large Victorian home with a pool, requiring quite a bit of maintenance on the home and grounds); a nighty rental condo that requires some upkeep and management, and a 160 acre farm that requires maintenance. It is actually leased to someone else for farming, but part of it is not in the lease and requires mowing, brush clearning, tree trimming or removal, ditches cleared, fences mended, etc. (no outbuildings or residence). So that's what it is.
Expert:  Dwayne B. replied 4 months ago.

Since you are living there (or can live there) I still think the appropriate classification is Residential. As I mentioned, I don't think it makes a huge difference other than for reporting purposes but it's better to be accurate just in case it ties in with something else in another database.

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