« Weekly Business Tip: How Much Do I Need in Retirement? | Main | State Family Child Care Licensing Standards Fail Children Says New Report »

03/20/2012

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a0133f3fc5805970b016303149e6e970d

Listed below are links to weblogs that reference Does Paying Someone Less than $600 a Year Make Them an Independent Contractor?:

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Hilary Cypher

Tom, what are the tax consequences for a person who WOULD be considered an independant contractor? I know a woman who substitutes once in a while for another provider in my area, and I am considering having her substitute occasionally for me as well. Would it benefit her at all to get a tax id number and work for both of us as an independant contractor?

Tom Copeland

If you truly had an independent contractor and paid them less than $600 in a year, there are no forms to fill out. If you paid $600 or more, you must file a Form 1099 Misc. with the IRS and give a copy to the independent contractor. No other forms or taxes are owed. In both cases you can deduct what you pay the person. It's thus much easier for you if this person is an independent contractor. So, she should get a tax id number. For more, see my article: http://www.tomcopelandblog.com/2011/03/what-is-an-independent-contractor.html

VV

Is there any way that the IRS would know if I was paid by less than $600 as an independent contractor if I didn't claim it?

tom

If you were audited as a provider, the IRS would ask to see attendance records or CACFP records that would indicate how many children were in your care. Then they would see if you got paid for each child. If you are not a provider, you could be found out if the person you worked for got audited and listed you as an expense.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Subscribe

  • Email Subscription

    Enter your email address:

    Delivered by FeedBurner

Become a Fan

Poll


Blogroll

Google Analytics