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    Wages Paid

    Have a client that owns a business, sole proprietor, Sch. C.
    Client hired a new employee, worked one week, in Dec., 2005, paid a salary for the week,
    with applicable payroll tax deductions.
    Problem: Employee quit after one week and client did not get a W-4. Does not
    even know the individuals last name. Only the first name.
    How would you handle this particular payroll in regards to form 940,
    941 & W-2?

    #2
    What?!?!?!

    First of all dig out your old black CCH books - you know those thick, heavy things we use to use to look up tax law. Grab it with both hands and whack your client on the head with it!!!

    If the payroll taxes have not been paid, maybe look at calling the net pay subcontract expense. I know you cannot file a 1099 for this and would probably be disallowed in an audit.

    The other option is teach the client a lesson and make it non-deductible.

    Matt
    I would put a favorite quote in here, but it would get me banned from the board.

    Comment


      #3
      I love it!!!

      Originally posted by Matt Sova
      First of all dig out your old black CCH books - you know those thick, heavy things we use to use to look up tax law. Grab it with both hands and whack your client on the head with it!!!
      There are days when I would really like to take your advice and do just that!
      http://www.viagrabelgiquefr.com/

      Comment


        #4
        Matt, the

        things you mentioned were done. Client just brought the Dec. info in and I was just
        glancing through it and noticed that 1 paycheck that was written to that particular
        individual.
        Unfortunately, the payroll tax deposit has been made.
        The net check was only amout $115. I could do as you suggested, considering it
        to be contract labor and show an overpayment on the form 941 for the 4th qtr.

        Comment


          #5
          I agree that I would deduct it as independent contractor or miscellaneous expense as it isn't worth all the problems otherwise. However, Matt, there is no reason the IRS auditor would disallow the expense as it was an ordinary business expense. Of course payroll or fail to file 1099 tax penalties could be charged by the auditor.

          Comment


            #6
            Originally posted by Bird Legs
            The net check was only amout $115. I could do as you suggested, considering it to be contract labor and show an overpayment on the form 941 for the 4th qtr.
            That would seem to be a good option and you're not required to file a 1099 because it's under the $600 limit.
            http://www.viagrabelgiquefr.com/

            Comment

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