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If I gift money to a family member, where do I report it on my taxes?
Thanks.
My family member works for me, but I have not registered an EIN number or as an LLC.
8 Answers
- Anonymous5 years ago
Get an extension and HIRE an Enrolled Agent to figure this out.
The poster has a 1099-K (meaning at least $20,000 changed hands) under their SSN and waffles on the actual business set up. Previously they implied that the relative owned and ran the business and they just allowed their name to be used. This post says, no, it's their business and the relative worked for them.
Based on the newest information, I'd say you have to do a schedule C and the pay to the relative should have been on a W-2 and issued weeks ago. If you pay someone for work, it is NOT a gift.
- CarVolunteerLv 65 years ago
Was this money a gift as you stated, or pay for work done as you implied. If it is for work done for you own business (you don't need to have an EIN or be an LLC to be a business), you report it as an expense on your Schedule C. I think you don't have to pay FICA if the family member is your child under age 18 or so, but you definitely need need professional help.
- troLv 75 years ago
if you want to consider this a gift it isn't reported anywhere unless you exceed the annual limit then you report it on a 709
if you are actually operating a business that you have a relative perform services for you you issue them a 1099 M and report it as an expense on Sch C
- ?Lv 75 years ago
If you give $14,000 or less to a person, you don't report it. It you give more than that to one person, you need to pay a gift tax, and you'll file IRS form 709.
EDIT: you don't have to register as an LLC or get an EIN to properly pay a salary. You really should hire an accountant for help, because what you're doing is tax fraud. By "properly", I mean "legally".
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- JudyLv 75 years ago
You don't unless you gave any one person over 14K in one year, then you file a gift tax return. A gift is not deductible.
- MadManLv 75 years ago
Why would you? If the person works for you, you have to pay her properly, with taxes withheld and you paying the employer's share of the FICA taxes.