Tax Question About Hiring Subs

 
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Old 11-13-2017, 10:05 AM   #1
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Tax Question About Hiring Subs


I'm just starting out as a contractor, just got my C27, and this year I've been hiring guys from Home Depot to help here and there on little jobs. I'm about to take one of them on as an employee. My question is how do I deduct the labor for all of the random people that have worked a day here and a day there? None of them are repeat subs, so haven't earned $600 this year. Someone told me for small amounts of misc. labor I can write it off as just "labor". Well how much exactly is a small amount? I've paid around $2000 for this kind of help this year, is there a limit on how much is allowed.

Thank you.
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Old 11-13-2017, 02:19 PM   #2
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Re: Tax Question About Hiring Subs


There is no such thing as "just labor". Employee's need to be paid as per Federal and State regulations.

If you paid them cash it's out of your pocket, you pay the taxes and such. There is no biz expense or deduction as you say...

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Old 11-13-2017, 08:08 PM   #3
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Re: Tax Question About Hiring Subs


You can hire non-employee day labor up to $600 per person per annum without providing them a 1099...

https://www.irs.gov/pub/irs-pdf/i1099msc.pdf
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Old 11-13-2017, 08:16 PM   #4
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Re: Tax Question About Hiring Subs


Never heard Juan and Jose' from the corner or some parking lot referred to as subs before
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Old 11-13-2017, 08:42 PM   #5
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Re: Tax Question About Hiring Subs


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Originally Posted by NYgutterguy View Post
Never heard Juan and Jose' from the corner or some parking lot referred to as subs before


Lol


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Old 11-14-2017, 10:53 PM   #6
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Re: Tax Question About Hiring Subs


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Originally Posted by Windycity View Post
Lol


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Pay with a check or a signed receipt for cash pay. When reaching 600, be sure to have enough data to issue a 1099.

Legal risk:
- be sure to tell them the result desired. If you show them how to do something and provide direct supervision, then they are considered an employee and you must pay accordingly (taxes, healthcare, comp etc)

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Old 11-15-2017, 06:13 AM   #7
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Re: Tax Question About Hiring Subs


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Originally Posted by sefiroxx View Post
Pay with a check or a signed receipt for cash pay. When reaching 600, be sure to have enough data to issue a 1099.

Legal risk:
- be sure to tell them the result desired. If you show them how to do something and provide direct supervision, then they are considered an employee and you must pay accordingly (taxes, healthcare, comp etc)

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You can relate preferences and highly recommend, which encompasses service, you just can't dictate it without causing a red flag for some guy behind a desk who doesn't understand construction...
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Old 11-15-2017, 08:05 AM   #8
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Re: Tax Question About Hiring Subs


My subs wife, makes the best tamales @ Christmas time


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Old 11-15-2017, 03:43 PM   #9
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Re: Tax Question About Hiring Subs


Quote:
I've been hiring guys from Home Depot to help here and there on little jobs. I'm about to take one of them on as an employee. My question is how do I deduct the labor for all of the random people that have worked a day here and a day there?
You don't. You keep your mouth shut and the money comes out of your own pocket. When you do hire one as an employee you need to do it correctly. I9, W2, withholding, etc. You will have a problem if no SS# and they aren't legal.

-Hal

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