I'll start right off saying when I started working for my grandfather, it was "under the table". Now he's handicapped, stays at home, I take care of the business and even have my name on some things like the bank account and such. But I'm still in the same situation as when I started. I don't want to get into any trouble. I just want to set it up so I pay what I need to pay in income taxes to keep the government off of me. What do I do?
2007-11-12 08:27:55 · 5 answers · asked by Matt 2 in Business & Finance ➔ Taxes ➔ Other - Taxes
You'll hve to set yourself up as an employee of the company, and, adversely, you have to fill out tax forms and paperwork for the company files so you know how much taxes to deduct from your own checks.
2007-11-12 08:32:12 · answer #1 · answered by Love My Hubby - Hate His Mom 6 · 0⤊ 1⤋
You'll have to start filing tax returns and paying your taxes. To be totally legal, you'd have to go back and file returns from the time you started working and illegally evading taxes.
Exactly how you file depends on how the business is set up - corporation, partnership between you and your grandfather, or some other way. The best way for you to sort this out is to talk to a CPA and ask them how to proceed.
2007-11-12 10:42:08 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
Your grandfather can give you a 1099 for the monies he has paid you this year. He doesn't have to claim you as an employee and pay his share of the employment taxes. Good for him, not for you. Then you need to file a schedule C for the 1099 income. It's not as hard as it appears to fix this situation. Even if you don't go back to previous years at least start now to do this right so it doesn't come back on you in the future.What does he do about his taxes? Does he include the business on his taxes? E-mail if you need more info-
2007-11-12 10:23:28 · answer #3 · answered by Anonymous · 0⤊ 1⤋
You need to find out how your grandfather files his business. The money he pays you must come from somewhere. What you can start doing is having him either pay you wages, or call yourself self-employed. From there, you can start paying taxes, Social Security and Medicare. If you run the business already, talk to him about you being a partner, and set the business up as an LLC. Good luck
2007-11-12 08:33:47 · answer #4 · answered by rob b 3 · 1⤊ 0⤋
File a tax return.
2007-11-12 08:30:27 · answer #5 · answered by Will Mundy 3 · 0⤊ 2⤋