recording cash vendors

Just call the IRS and they will help you out.:whistling

Best practice is to follow the laws and keep records of them the whole way through and then 1099 them for your tax purposes.

Workaholic said:

Best practice is to follow the laws and keep records of them the whole way through and then 1099 them for your tax purposes.

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Right! :thumbsup:

sprayer48 said:

Have a question ...
Have a couple of employees that I have always paid cash. never given them a 1099. no monies ever recorded anywhere.
now I want to at least record them in qb. I use qb 06.
can I show them as vendors or employees. how do I record a payment to them. What account does it go under and Item.
all mixed up with this one......thx...mark

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Since no monies were ever recorded, if you start now, you are creating what the IRS calls a "paper trail". Which is how, when they audit you, they will find you have not paid taxes on said people.

Just do it right from the get go, 1099 them if they are insured subs, or W-2 them if they are in fact employees.

The problem with acting like you have is, you are personally liable for all those payments as personal income. Hopefully (for you) you won't get audited but, if you do, you will be paying taxes and penalties on that money as though it was your own income you evaded.

Back when working, I would hire homeless guys to do grading and rough landscaping (move rocks). I would write them checks, have them sign the checks, then I would cash the checks for them on the spot out of personal funds. I would then deposit those checks back into my personal checking account. This creates a paper trail. It clearly documents who I paid and how much I paid. I wouldn't 1099 them and for that I could be penalized but, these guys have no way to receive mail. I was willing to take that risk.