payroll taxes

Filing Form 941 for Children in Your Sole Proprietorship

Employing your minor children in your sole proprietorship can make a lot of sense. It gives them experience, a bit of money, and can lower the average tax rate for your family.

You'll need to have them do "real" work, pay them a reasonable wage, and keep proper records and filings.

One filing you'll need to make is Form 941, "Employer's Quarterly Tax Return". If you ONLY employ your minor children in your sole proprietorship, they won't be subject to Social Security or Medicare taxes.

Use a Certified Payroll Processor to Avoid IRS Fines

If you outsource your payroll function, you should consider using a "certified" payroll processor.

If you do not use a "certified" payroll processor, you will be liable for unpaid taxes if the processor doesn't send your taxes withheld to the IRS.


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