MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

The W-2 Trap Parents Fall Into #taxes #smallbusiness

1 Jul 2026 · 0 min

Watch on YouTube

0:28

Parents running family management companies often think they must put kids on payroll and issue W-2s to transfer LLC ownership to them. You don't. Doing it triggers withholding obligations and paperwork you don't need.

Does my family management company, sole prop, need to put my children on actual payroll to generate a W-2 and do quarterly reports and all this crap so that I can then transfer them, the LLC, to my kids' bank accounts? The answer is, and this is a technical term, hell no. Okay, just remember that. That's under Code Section— I don't give a shit. You do not need to issue a W-2. In fact, it will cost you because then you're going to be withholding and all this other crap.