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Paying helper from side gig. Tax & reporting implications?

Posted on 6/18/21 at 8:48 am
Posted by Jimmy2shoes
The South
Member since Mar 2014
11004 posts
Posted on 6/18/21 at 8:48 am
I have a side gig and single member LLC that makes about $15k per year. No employees. I have a helper that volunteers for one larger event that I do. If I pay him $100 for the day what am I looking at as far as reporting? Do I have to take out taxes, FICA, workers comp., etc?
Posted by LSUGUMBO
Shreveport, LA
Member since Sep 2005
8492 posts
Posted on 6/18/21 at 9:02 am to
Just give him a $100 bill and call it a day. Not worth reporting.
Posted by cgrand
HAMMOND
Member since Oct 2009
38653 posts
Posted on 6/18/21 at 9:03 am to
quote:

If I pay him $100 for the day what am I looking at as far as reporting?

go to the ATM and take out 100 bucks
give it to your helper
Posted by LSUFanHouston
NOLA
Member since Jul 2009
37034 posts
Posted on 6/18/21 at 9:04 am to
quote:

I have a helper that volunteers for one larger event that I do. If I pay him $100 for the day what am I looking at as far as reporting? Do I have to take out taxes, FICA, workers comp., etc?



Nothing.

If you pay a "contractor" $600 per year, you have to send them a 1099 and file with the IRS.

A person helping out once a year for $100 would not be considered an employee, and would not make enough money as a contractor to send out a 1099.
Posted by Jimmy2shoes
The South
Member since Mar 2014
11004 posts
Posted on 6/18/21 at 9:11 am to
quote:

A person helping out once a year for $100 would not be considered an employee, and would not make enough money as a contractor to send out a 1099.



Thinking I might get him to help on one or two more other jobs so anything less than $600 is not an issue I am assuming? Can I deduct that $100-300 as a labor expense?
Posted by TigerDeBaiter
Member since Dec 2010
10257 posts
Posted on 6/18/21 at 9:13 am to
You write it off, it becomes an issue for him. If not, no problemo. Simple as that.
Posted by LSUFanHouston
NOLA
Member since Jul 2009
37034 posts
Posted on 6/18/21 at 9:37 am to
quote:

Thinking I might get him to help on one or two more other jobs so anything less than $600 is not an issue I am assuming? Can I deduct that $100-300 as a labor expense?


So if you give him cash, you always have the issue of proving what the cash was spent for.

If you give him a check, you would have no issue proving the deduction, but now there is a paper trail for him.

Realistically, for $300, the IRS auditor is not going to try to trace a check back to the guy. It's not worth it at that amount.
Posted by Mingo Was His NameO
Brooklyn
Member since Mar 2016
25455 posts
Posted on 6/18/21 at 9:39 am to
quote:

Thinking I might get him to help on one or two more other jobs so anything less than $600 is not an issue I am assuming? Can I deduct that $100-300 as a labor expense?


Youd want to deal with tax implications for $50?
Posted by el Gaucho
He/They
Member since Dec 2010
52913 posts
Posted on 6/18/21 at 10:16 am to
Cmon man get that tax haterade outta here just pay cash
Posted by Jimmy2shoes
The South
Member since Mar 2014
11004 posts
Posted on 6/18/21 at 11:07 am to
quote:

Cmon man get that tax haterade outta here just pay cash


The Man takes enough of my money! No one should willingly pay more in taxes if they don't have to
Posted by The Nino
Member since Jan 2010
21521 posts
Posted on 6/18/21 at 12:46 pm to
quote:

So if you give him cash, you always have the issue of proving what the cash was spent for.
He could just make a generic receipt. Provides documentation if its ever asked for

But as you said, no auditor is going to waste his time on this or this guy's business as long as it looks somewhat respectable on his return
Posted by Hayekian serf
GA
Member since Dec 2020
2504 posts
Posted on 6/18/21 at 2:30 pm to
Don’t report it.

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