Discussion:Amend 940 for $5?
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Discussion Forum Index --> Accounting Questions --> Amend 940 for $5?
| 16 March 2009 | |
| Scorp client does own payroll. 2007 she paid her daughter-in-law to man the phones, mail etc while on vacation. She paid d-in-law with a check but no withholding. State unemployment did audit and added it to wages. I know federal changes are eventually picked up at state level, but does it go the other way. Should she adjust the 940 for $5 and W-2s, 941, state withholding for $625 of income? Of course then the d-in-law will have to amend her tax return. | |
| 16 March 2009 | |
| It's not $5, it's $625, which is certainly enough income to report. Your client should have at least sent a 1099.
I don't know if I would amend payroll tax returns from 2007, but it's certainly reportable income for the daughter-in-law. If she didn't report the income, she needs to amend her return. | |
| 16 March 2009 | |
| Do nothing. Too small a change. Minimal tax changes due to the possible error. | |
| 16 March 2009 | |
| Maybe you should do my tax return next year. I have all kinds of "minimal" income items for you not to report. | |
| 16 March 2009 | |
| the issue isn't wheter $625 is material, the issue is whether it should have been on a W-2 or not. | |
| 16 March 2009 | |
| I agree Kevin. The d-in-law came and went as she pleased that week. So I think it should have been on 1099 (which it wasn't). But what do I do now that the state unemployment department has it reported as wages? | |
| March 16, 2009 | |
| Amend the applicable 941 form and the 940 to add the W-2 wages. Prepare the W-2 and W-3 forms. | |
| 16 March 2009 | |
| Good point. The OP did refer to the payroll tax returns specifically. Sorry for my overzealous response. | |
| 17 March 2009 | |
| I was mistaken about the amount. She paid her d-in-law part of the money and her son part of the money. So no one got more than $600. That is why she did not file a 1099 although she considered this come and go as you please contract work rather than employees. Her son did some cleaning while they were on vacation, but also is a W-2 employee and partial shareholder.
Would you still correct with W-2c, W-3c, 941-x, amend 940 and state withholding and state W-2 and W-3? Since the d-in-law did not receive a W-2 would you still correct this with a W-2c (if corrected at all)? | |
| 17 March 2009 | |
| Could this possibly be considered "Payments to nonemployees who are treated as your employees by the state unemployment tax agency." (From 2007 940 instructions page 5 and 6)? | |
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