Nobody’s perfect. Including (as if you didn’t know) the IRS. But when they make a mistake, the IRS admits it and this can be very good news for you.
You see, in the past, the IRS said that after December 31, 2008, single-member LLCs were subject to corporate payroll tax treatment.
Now the IRS and the Treasury Department admit that they did not intend to eliminate the pre-2009 single-member LLC tax breaks — the ones that applied to family employment. I’m talking about the favorable avoidance of FICA, Medicare, and unemployment taxes when a parent hires his or her child.
It may sound complicated but I’ll make everything clear in my brand new article Tax Tips: IRS Now Says No Payroll Taxes on Family Employment in a Single-Member LLC.
Three ways our fact-filled article can help you:
- We’ll explain the family-employment tax break. Under the family-employment rules, when a parent hires his or her child under the age of 21, unemployment taxes do not apply. Under the age of 18, unemployment, FICA, and Medicare taxes do not apply. Get all the facts when you read the full article.
- We’ll tell you if you need to amend your returns. To help you decide if you should amend your tax returns for 2009, 2010, and/or 2011, we’ll ask you three short questions. If you answer “yes” to all three questions, you should consider amending your returns. Get the whole story when you read the full article.
- You’ll learn what to do if you operate your business today as a single-member LLC. The tax law treats your LLC as a “disregarded entity” for both income and family employment tax purposes. To find out what this means, read the full article.