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Paying Helpers

Discussion in 'Commercial Snow Removal' started by Hambrick & Co., Jan 11, 2008.

  1. Hambrick & Co.

    Hambrick & Co. PlowSite.com Addict
    Messages: 1,350

    I have one guy that helps me from time to time, are any of you paying your employees in cash or is it just strictly check from a business account? I don't want to 1099 him if I have to but I also don't want to get in any tax trouble. Any help would be greatly appreciated. Thanks Mike
  2. Burkartsplow

    Burkartsplow PlowSite Veteran
    Messages: 3,246

    I have a friend who comes out and helps me out and I just pay him cash. He is a teacher and over the holidays and he had a few weeks off. I would not worry if it is just for one person. But if you are doing it alot that is not a good idea... Just my opinion....
  3. hydro_37

    hydro_37 PlowSite Veteran
    from iowa
    Messages: 3,790

    In Iowa you don't have to 1099 someone till they make over $600. You can pay cash and write that on taxes as "day labor".
  4. santelikk

    santelikk Member
    Messages: 67

    hydro is correct.

    IRS rules are that you can be paid in cash up to $600, if during the fiscal year you make more than $600 you must get a 1099.
  5. Hambrick & Co.

    Hambrick & Co. PlowSite.com Addict
    Messages: 1,350

    Thanks for all the help.
  6. MileHigh

    MileHigh PlowSite.com Addict
    Messages: 1,827

    Check from business account.
    1099 every year.
  7. 3bladz

    3bladz Senior Member
    Messages: 173

    I guess you don't have work comp either?
  8. montanag

    montanag Member
    Messages: 53

    I just wanted to add my $.02, since I'm descended from a line of CPA's. If someone is hopping in your truck with you and working according to hours that you determine, they should be on your payroll. 1099's are issued to independent contractors, meaning that you don't have an inordinate amount of control over how your helpers get the work done, when they start, when they stop, breaks, etc. People have gotten into hot water over this. I issue 1099's to guys with their own trucks, insurance, and business license. Anybody jumping in with you is an employee and you ought to be treating them as such, witholding taxes, paying worker's comp. Read up on state law since it varies. The Department of Labor and Industry should have literature on this topic. Just CYA!! good luck

  9. montanag

    montanag Member
    Messages: 53

    Just one more question. Why don't you want to 1099 him. That benefits you because it serves evidence of an expense your business incurs. It also places the tax burden on your sub. Most contractors pay a small percentage for every $1000 of subcontractor work on their commercial liability, but it usually ends up substantially less than worker's comp or payroll liabilities. Maximize deductions unless you like subsidizing the government more than keeping cash for yourself!!
  10. powerjoke

    powerjoke PlowSite.com Addict
    Messages: 1,341

    if it ain't over i think $600 you don't have to 1099 them but i don't know b'cause my CPA takes care of that

    maybe it would be a good Q' fo your'e CPA because there probably is not alot of people on here who want to divulge alot of information in fear of getting in trouble (they think the IRS reads these forum's :rolleyes:) LOL

    EDIT: i am sorry guys: when i clicked on the thread it had no replies( my freakin slow computer i guess) but when i posted i seen that several replied
    Last edited: Jan 11, 2008
  11. Hambrick & Co.

    Hambrick & Co. PlowSite.com Addict
    Messages: 1,350

    I do not as I am the owner and technically the only employee thus far. Last I checked an owner can not claim workers comp against their own company. I am covered by my full time job.
  12. Jay brown

    Jay brown PlowSite.com Addict
    Messages: 1,783

    you probably alreay know this but you may want to get WC if you have any helpers. if the helper doesn't sue you his family will. i just had a employee spend 7 days in the hospital and has been off work for 6 weeks so far because he barely stepped on a nail and his big toe got infected. how much will that bill be?????? i'm guessing at least $30-40,000
  13. timewarp

    timewarp Junior Member
    from mass
    Messages: 6

    maybe some more help?

    If he is plowing for you alot have him be a sub contactor. The only thing is he using your plow becarefull with insurance. If he has his own plow, then subc is the way to go in my book.
    The other responses are correct, but pay with cash, then with check.(1200) And if he is your bud then a little cash extra, he won't say a thing.

    Just a thought,
    time warp
    Last edited: Jan 12, 2008
  14. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    My guys get first 600 as day labor/ per year, after that on the books (I have comp, etc through payroll co.). This is for shovelers, two of my drivers (brother & friend) want a large check at end of season (they both have full time jobs & $ 100 here & there disappears, 1 or 2 grand they can do somthing with), his friend was going to use it for a deck, last year my brother bought his girlfriend a ring.