Sch C temp payroll opposed to W-2 wages.

[AZ-Tax]

My clients Human Resources business or Franchise Temp Agency pays his office staff wages then W-2 them at end of year. Then his Corp Franchise issues checks to the temp employees and also W-2's them. Then Corp Franchise bills my client for these temp employees payroll.

Where on the Schedule would this expense be entered? Ln 26 gross wages?

[erchess]

my two cents

I would not call monies that do not match my client's Forms W-2 and 1099 "wages". I would do this in case the IRS tried to match those submissions with the Return. I would probably show all monies paid to the parent company as "Commissions and Fees".

[AZ-Tax]

erchess, temps also W-2

I finally got ahold of my client (owner of temp agency franchise) and he tells me he not only W-2's his internal employees who physically work for him but he also W-2's the temp employees who physically work for his clients. Do I assume all these wages go on Ln 26 (gross wages) of Sch C?

[outwest]

Sure..

isn't that what they are? No need to over think this.

Now, if I was doing financial statements, I might consider showing the wages of employees placed at a client as a cost of sales item separate from the internal employee's wages.

[erchess]

OK so we have a revised set of facts

The owner of a Franchise of a Temp Agency issues regular paychecks throughout the year and W-2s at the end of the year both to the Staff who worked in his office and to the Temp Employees. We had been under the impression that the National Company paid and W-2'd the Temp Employers.

Assuming that set of facts then yes your client reports all the wages he actually paid as gross wages. I didn't look up the line number but 26 sounds right.