Monday, January 21, 2008

Wife Helps Plumber Husband

June --

We have had a plumbing business for 3 years.

My husband does the plumbing and I do all the scheduling of jobs, and bookkeeping. We have no employees. We each take a salary, this year our tax preparer wants me to do a W2 for myself and my husband, I'm not sure about this. Wouldn't this put us in the category of a employee?

Diane in Payson, AZ

Oh My Goodness!!! Diane. If you are giving me the straight scoop -- meaning you are accurately telling me what your tax preparer said, then there is a whole lot wrong here.

Since you did not say that you are incorporated I assume your plumbing business is your husband's sole proprietorship. He cannot be his own employee in a sole proprietorship and so he does not get a salary and would not get a W2.

If someone is an employee then certain registration must be done at the start of the employee relationship. And various payroll forms must be filed with the feds and often the state as well during the year. You don't decide at the end of the year, oh well, guess I'll do a W2.

You need to talk with a tax professional who knows what she's doing. Perhaps your local Small Business Development office can help you.


1 comment:

June Walker said...

Hi June,

Thank you so much for responding. We are a LLC in the state of Arizona both of us are listed on the LLC.

Diane, the plumber wife

Hi Diane,

What tax structure is your LLC?

Read these posts on LLCs before answering.