You still have to provide them a W2 or a 1099 and your child has to file a return and report the income. Note: for your child under 17 you do not have to pay FICA or FUTA taxes. You deduct this under wages in the expense entry section (wages does not show up as an expense if you said you did not have employees in the profile section of your business.)
Note: as part if the home and Business package you receive the W2/1099 reporter. This gives you the ability to create the W2 and the W3 transmittal document that goes with it. The W2/1099 reporter is a separate program from the individual income tax program, but is accessible from within TurboTax. To access the W2/1099 reporter you need to leave the income tax program so you will need to save your return before you open the reporter. When you are ready to create your Child?s W2 click on ?File? on the tool bar and select ?new tax return?, then click on the button ?start return? You should get a popup box & the second item should be the ?2007 US Forms W2/1099 reporter? (If you don?t see this, then you do not have a complete install ? you can try re-installing or you can call customer support for help). Click on the W2/1099 reporter and click OK ? you are now on your way to creating a W2.
(Posted 02/02/08)
