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Paying helper from side gig. Tax & reporting implications?
Posted on 6/18/21 at 8:48 am
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 on 6/18/21 at 9:02 am to Jimmy2shoes
Just give him a $100 bill and call it a day. Not worth reporting.
Posted on 6/18/21 at 9:03 am to Jimmy2shoes
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 on 6/18/21 at 9:04 am to Jimmy2shoes
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 on 6/18/21 at 9:11 am to LSUFanHouston
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 on 6/18/21 at 9:13 am to Jimmy2shoes
You write it off, it becomes an issue for him. If not, no problemo. Simple as that.
Posted on 6/18/21 at 9:37 am to Jimmy2shoes
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 on 6/18/21 at 9:39 am to Jimmy2shoes
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 on 6/18/21 at 10:16 am to Jimmy2shoes
Cmon man get that tax haterade outta here just pay cash
Posted on 6/18/21 at 11:07 am to el Gaucho
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 on 6/18/21 at 12:46 pm to LSUFanHouston
quote:He could just make a generic receipt. Provides documentation if its ever asked for
So if you give him cash, you always have the issue of proving what the cash was spent 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
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