USA Taxi income

[stfarm]

I am a consultant that travels a lot. Instead of using a third party taxi to drive me to the airport I want my wife to drive me and charge me as the taxi company would. That way she would have some extra income

We would create a legal business entity for tax purposes I suppose, maybe a LLC.

My question is if this is even legal, and if so, what else do I need to watch out for?

Thank you for your help,

Steve

 

[kirby]

Employing family members is legal and not unusual. Be sure to read IRS Publication 15 which will tell you to ALSO pay some employment tax when your wife becomes your employee. Not your employee, you say? Tough to prove unless you've sent her off frequently in the family car cruising the streets looking for fares besides your business.