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gmk74
Level 1

Recording W2 income in my company books

Hello, We have a unique situation. We are a small partnership consulting company but are being paid by W2 from one of our clients. This is a long term client and we would like to show the (already taxes) income on our PNL and or Balance Sheet. How can we do this without overstepping legality? We are located in WA state. Our accountant does not support the idea but we do need to show the income for some things like LOC etc. 

1 Comment 1
Rainflurry
Level 13

Recording W2 income in my company books

You can't ask them to issue 1099s instead?  I assume you know this but when they issue W-2s, they need to pay the employer portion (7.65%) of Medicare and Social Security on your "wages" plus federal and possibly state unemployment.  Why would they do that?  Also, if you need to substantiate your partnership income, a W-2 is not going to suffice.  A W-2 will say that you were an employee of your client.  I'm with your accountant on this.  Your client should have no trouble issuing you 1099s, it will save them money.  

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