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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I paid my 17 year old grandson to work for me and did not withhold

Resolved Question:

I paid my 17 year old grandson to work for me and did not withhold taxes.
how bad will this hurt me come tax time?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

Your requested professional is not online. I would be more than happy to help you.

Megan C :

I also need to know if you own a business, or if this was more of an informal thing where he just helped you around the house

Customer:

I own the business,

Megan C :

Okay so you own a business and you paid your grandson to work for you. You would need to withhold taxes and issue a W-2. How much this will impact you depends on how much you paid him overall. How much do you think you paid him in wages?

Megan C :

Also, was this for 2012 or did this just happen in 2013?

Customer:

$1795

Customer:

summer of 2013

Megan C :

OK...that's not very much at all. And it was still this year. You can correct it

Customer:

how??? thank you

Megan C :

Do you have any other employees?

Customer:

yes, 6 others

Megan C :

I ask because if you owe less than $2,500 in payroll taxes, you can file quarterly only

Megan C :

but it sounds like you will have to be a monthly payroll depositor.

Customer:

we are

Megan C :

Well, amend your payroll tax filing for the quarter that he worked for you, and remit the taxes

Customer:

will there be a penalty?

Customer:

do I have to submit his payroll hours or just wages?

Megan C :

There may be a slight penalty, but on $1,800 it's not going to be much

Megan C :

Your payroll tax return doesn't list hours...it lists wages

Customer:

so I can just have my book keeper handle this will he get a w-4 or can I send him a 1099

Customer:

or does he have to claim anything? He live in Washington state and we are in Oregon

Megan C :

You really should treat him as an employee if you controlled his work. If he's not an independent contractor, he should not be paid on a 1099

Megan C :

Here is some information on correcting the payroll tax return: CLICK HERE

Customer:

thank you

Megan C :

How old was your grandson again?

Customer:

17

Megan C :

There's no withholding requirement on those under 18, per publication 926 and there's no withholding requirement for wages under $1,800

Megan C :

So you're good...you don't even need to do anything

Customer:

that is what I understood to be true from years ago, thank you so much for confirming it for me.

Megan C :

You're welcome.

Megan C :

Is there anything else I can help you with today?

Megan C :

If there's nothing else I can assist you with today, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

can I print this answer out

Megan C :

Yes you can! Use your browser's print function, or copy/paste it into Word.

Customer:

thank you

Megan C :

The rating feature is along the bottom of the screen

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and other Tax Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Thanks for your positive rating. Please come back and visit me any time you have a question that needs answered. It was a pleasure working with you today.

Thanks again!

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Megan C
Megan C
8219 Satisfied Customers
Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level