I am an owner of single-member LLC. Can I put myself and my wife on payroll? Owner doesn't need to put on payroll?

Let's sort out together how to record yourselves in payroll, @aokihouse22.

If you need to file employee forms 941 or W2, we can add you and your wife as employees in QuickBooks Online (QBO). And, if you need to file a 1099, it would be better to enter yourselves as contractors. However, if you don't need to file these forms, let's set up an owner's draw instead. This will allow you to track withdrawals of the company's assets to pay an owner. 

On the other hand, though we're unable to confirm what to use from the abovementioned, and if you're unsure, I recommend contacting the IRS (Internal Revenue Service) or your tax advisor to discuss this matter with you. 

Furthermore, you may want to check this article to learn how to add deductions your employee needs to pay each payday in QuickBooks Online Payroll and QuickBooks Desktop Payroll: Set up, change, or delete employee-paid payroll deductions. 

Kindly add your reply, and I'll be sure to share other details with you if you have more queries about QuickBooks payroll. Keep safe. 

Thank you for your advice. My wife and I am not sure the procedure to hire employee.

It seems that using QuickBooks Online Payroll will make it easy to manage payroll and file taxes.

I'll update you on my current situation. I have been operating as a sole proprietor until now. On April 1, 2024, I started a single-member LLC, but I am still in the process of transitioning my personal business to the LLC.

My wife will be handling bookkeeping and payroll using QuickBooks, and I would like to employ her.

Is there any disadvantage to also employing myself as an employee? I have obtained an EIN, but I plan to get workers' compensation insurance soon. Is it okay to set up payroll first?

Hello, @aokihouse22.

It's great that you're considering hiring your wife as an employee! As a married couple, you want to explore the benefits of operating your business, which can provide tax and legal advantages. However, before you proceed, there are a few things to consider:

Employing yourself as an employee can lead to double taxation, where you are taxed twice on the same income. As a single-member LLC, you are already taxed on the business income, and then again as personal income. 

Moreover, you can simplify your payroll and tax reporting process, as you will only need to worry about reporting your own income and payroll taxes. It is important to consult with a tax professional to determine the best course of action for your specific situation and to ensure compliance with all tax laws and regulations. 

Furthermore, after consulting a tax professional you can now start setting up payroll, you can refer to this article for more detailed steps: Get started with QuickBooks Online Payroll.

Additionally, I'm adding these links that you use for reference. This contains details on how to seamlessly manage your payroll and accounts: Learn the reconcile workflow in QuickBooks

If you have further questions about making yourself an employee, you can comment below, and we'll respond to you as soon as possible.

@aokihouse22 

You cannot be an employee of your single-member LLC.  The IRS considers a SMLLC the same as a sole proprietorship.  You have the option to be taxed as a corporation by filing Form 8832 with the IRS, in which case, you can be an employee and are required to pay yourself a reasonable wage.