Paying family member question

[XLanManX]

I am a landlord and will be paying my teenaged son approximately $2,000 this
year to assist me with yardwork and minor maintenance on rental properties. I
am wondering how I should record the money I pay him. Can I do it with a 1099,
or must I issue a W-2? Also, is it necessary to be set up as a business to
issue W-2's?

 

[Paul A Thomas]

I am a landlord and will be paying my teenaged son
approximately $2,000 this year to assist me with
yardwork and minor maintenance on rental properties.
I am wondering how I should record the money I pay him.

Can I do it with a 1099, or must I issue a W-2?

Probably a W-2 would be best.

Also, is it necessary to be set up as a business to
issue W-2's?

You ARE in the business of renting property.

 

[Don Priebe]

Also, is it necessary to be set up as a business to
Although you can rent property, file your Schedule E, or even issue a
1099-MISC to a subcontractor using only your social security number, you
must get an Employee Identification Number (EIN) to issue a W2.

 

[XLanManX]

Subject: Re: Paying family member question

From: "Paul A Thomas" (e-mail address removed)
Date: 4/28/2004 1:34 PM Pacific Daylight Time
Message-id: <[email protected]>






Probably a W-2 would be best.




You ARE in the business of renting property.

Yes, but I haven't registered a business name with my state or performed any of
the other formalities usually associated with creating a business. Can I still
issue a W-2?

 

[XLanManX]

Subject: Re: Paying family member question

From: "Don Priebe" (e-mail address removed)
Date: 4/28/2004 2:42 PM Pacific Daylight Time


Although you can rent property, file your Schedule E, or even issue a
1099-MISC to a subcontractor using only your social security number, you
must get an Employee Identification Number (EIN) to issue a W2.

So you think a 1099-MISC would be the better choice?

 

[Paul A Thomas]

Yes, but I haven't registered a business name with my state or performed any of
the other formalities usually associated with creating a business. Can I still
issue a W-2?

Yes, you can. As Don mentioned, you will need a tax ID number.

It's possible that a rental "business" is exempted from most of the typical
"business" registrations. Although there may be some formalities in certain
jurisdictions.