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I have an LLC and my spouse does work for me. He also has a full time job. Can I give him a W-2 mostly for the purpose of qualifying for more of a car loan since I don't show enough income yet to qualify?

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rated:
Maybe you can't afford this car.

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joross10 said:   I have an LLC and my spouse does work for me. He also has a full time job. Can I give him a W-2 mostly for the purpose of qualifying for more of a car loan since I don't show enough income yet to qualify?
  Is he an employee?

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joross10 said:   I have an LLC and my spouse does work for me. He also has a full time job. Can I give him a W-2 mostly for the purpose of qualifying for more of a car loan since I don't show enough income yet to qualify?
  Every dollar you "pay" him will reduce your income a dollar.  Your LLC could pay you W2 income just as easily..

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Glitch99 said:   
joross10 said:   I have an LLC and my spouse does work for me. He also has a full time job. Can I give him a W-2 mostly for the purpose of qualifying for more of a car loan since I don't show enough income yet to qualify?
  Every dollar you "pay" him will reduce your income a dollar.  Your LLC could pay you W2 income just as easily..

Plus you will have to pay 7.65% in Medicare and Social Security taxes on your husband's W-2 income as well as state and federal unemployment taxes.  

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BigTR said:   
Glitch99 said:   
joross10 said:   I have an LLC and my spouse does work for me. He also has a full time job. Can I give him a W-2 mostly for the purpose of qualifying for more of a car loan since I don't show enough income yet to qualify?
  Every dollar you "pay" him will reduce your income a dollar.  Your LLC could pay you W2 income just as easily..

Plus you will have to pay 7.65% in Medicare and Social Security taxes on your husband's W-2 income as well as state and federal unemployment taxes.  

  You'd pay the SE tax anyway, but FUTA is a small cost as well. OP may also have to deal with workers comp, state unemployment, other reporting, etc. If no other employees, the additional compliance costs seems pretty high just to be able to get a car loan.

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stanolshefski said:   Maybe you can't afford this car.
I can afford it and i have an 805 credit score. Maybe car dealers don't need to see my self employment taxes? I don't have enough years in to make my income count. Not sure how that works I guess.

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marginoferror said:   joross10 said:   I have an LLC and my spouse does work for me. He also has a full time job. Can I give him a W-2 mostly for the purpose of qualifying for more of a car loan since I don't show enough income yet to qualify?
  Is he an employee?


Yes. Part time and he doesnt mind working for free since it benefits both of us but I thought maybe there would be some benefit to paying him.

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Glitch99 said:   joross10 said:   I have an LLC and my spouse does work for me. He also has a full time job. Can I give him a W-2 mostly for the purpose of qualifying for more of a car loan since I don't show enough income yet to qualify?
  Every dollar you "pay" him will reduce your income a dollar.  Your LLC could pay you W2 income just as easily..


I can get a W-2 even if I'm the single member?

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joross10 said:   
stanolshefski said:   Maybe you can't afford this car.
I can afford it and i have an 805 credit score. Maybe car dealers don't need to see my self employment taxes? I don't have enough years in to make my income count. Not sure how that works I guess.

  How are you buying the car? Who told you that the income doesn't qualify? Have you applied for a loan? Why can't your spouse qualify on their own income from regular employment?

The FWF way to buy a car is the bring your own financing to the deal, and give dealers a chance to beat it. Try a good national credit union like Alliant Credit Union.

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joross10 said:   
marginoferror said:   
joross10 said:   I have an LLC and my spouse does work for me. He also has a full time job. Can I give him a W-2 mostly for the purpose of qualifying for more of a car loan since I don't show enough income yet to qualify?
  Is he an employee?


Yes. Part time and he doesnt mind working for free since it benefits both of us but I thought maybe there would be some benefit to paying him.

  What state do you live in? Did you make an election for your LLC to be taxed differently than the default? If you do hire him as an employee, are you going to handle all of the additional compliance internally?

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I have never been asked to prove my income on a car loan. I have a high credit score, and a low credit utilization. You should try to apply for the loan.

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daw4888 said:   I have never been asked to prove my income on a car loan. I have a high credit score, and a low credit utilization.

To the contrary -- I have always had to prove my income on all loans and my credit scores numbers (since we are bringing cyber penises out) are/have been steadily atop for many years.
  

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fattywallace said:   
daw4888 said:   I have never been asked to prove my income on a car loan. I have a high credit score, and a low credit utilization.

To the contrary -- I have always had to prove my income on all loans and my credit scores numbers (since we are bringing cyber penises out) are/have been steadily atop for many years.
  

  
They ask what your income is, and what my house payment is, typically the same info I need for a CC signup.  But they have never asked for me to provide W2's or Tax forms like what is required for mortgage.

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The main reason you want to add a spouse to payroll is so that you can cheaply put more money into a 401k. Pay spouse $2,000/mo and put it all into a 401k. You pay double payroll taxes (employer and employee), but you reduce income taxes and may help to qualify for assistance on the ACA.

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samko said:   The main reason you want to add a spouse to payroll is so that you can cheaply put more money into a 401k. Pay spouse $2,000/mo and put it all into a 401k. You pay double payroll taxes (employer and employee), but you reduce income taxes and may help to qualify for assistance on the ACA.
You don't need a W-2 if the LLC is treated as a sole proprietorship.

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You can check with other banks and credit unions for auto loan financing. Some banks are not friendly to self employed, but plenty of them will accept your income as is.

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Lightstream's unsecured loan might be an option as well.

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Glitch99 said:   Every dollar you "pay" him will reduce your income a dollar.

Which may be the right thing to do. If it pushes him high enough that he caps out on social security, that might make sense. If it makes a difference in his social security that you automatically get half of, that might be a good reason too.

My story on this is an aunt and uncle at the low end of income (family farm). The wife insisted that the income be split 50/50. They ended up paying 2x in FICA, but only received 2x in benefits. Had they put all the income to one of them, then that 2X in FICA would have most likely produced a 3X in social security benefits.

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