This is really about conducting business. I want to financially reward any user for doing something productive on my website. However since they are not employed by me, what does it mean to pay them (e.g. accounting issues, etc.). I am not clear about what areas I should be researching into to understand the problem more. Thanks.
2006-06-16 06:05:14 · 7 answers · asked by johnla.work 1 in Business & Finance ➔ Small Business
Pay them as a contractor. They would receive a 1099 (miscellaneous income) from you at tax time. I believe it would be considered a business expense for you. Check with an accountant or go irs.gov. There are some helpful tutorials for small businesses there.
2006-06-16 06:12:48 · answer #1 · answered by creativereading 4 · 0⤊ 0⤋
The simplest answer is that if it's less than $600 per year and the person is not supervised by you, you can just give them cash and call them anything but an employee.
If it's $600 or more per year and the person is not supervised by you, it's the same deal except you have to give the person a Form 1099 at the end of the year. That money will be taxable to the person.
Regardless of what you call the person, if you supervise the activity the IRS could declare that person an employee and assess you for back withholding taxes and penalties and that's just the beginning.
I'm not a tax accountant but I have been an IT consultant forever and have bumped into these situations before.
2006-06-16 13:21:12 · answer #2 · answered by Westborough Joe 2 · 0⤊ 0⤋
Please check for research under "Contractors".
The people that would do work for you, but are not necessarily employed by your are called "contractors". You must, at the end of the year, for tax purposes, supply each contractor will a 1099 form. They will be responsible for paying their own taxes. Nothing will come from you and/or your company.
Please consult an Accountant (possibly H & R Block) to help you with understanding all of the tax laws.
I hope that my answer has helped you.
Have a lovely rest of the day.
2006-06-16 13:12:43 · answer #3 · answered by Goblin g 6 · 0⤊ 0⤋
Pay him as a consultant/independent contractor. You pay him the whole amount and if he is paid over $600 or more you have to issue a 1099 at tax time. you have no withholding or anything, that is his responsibility.
2006-06-16 17:39:36 · answer #4 · answered by kadel 7 · 0⤊ 0⤋
Subcontract. This means to hire a company to do a job your company either does not want to do, is not qualified to do, or doesn't have the man-power to do. etc... The subcontractor Doesn't work directly under the company name, but works for the company never-the-less.
2006-06-16 13:13:52 · answer #5 · answered by richman3700 1 · 0⤊ 0⤋
You could hire a subcontractor for a particular task.
2006-06-16 13:12:08 · answer #6 · answered by charlie brown 1 · 0⤊ 0⤋
You may pay them as a contractor that way there is no other liabilities to you .
2006-06-16 13:09:40 · answer #7 · answered by jenntherealdeal 2 · 0⤊ 0⤋