Do I report money I paid to employees?

Question

We had "employees" last year for the first time. We never really defined if they were self employed or independent contractors. Anyway, if I report that I paid them money, then I was supposed to send a W2, right? Well I did not send a W2 so do I now just exclude that money from my expenses?

Answer 1

You'd better see an accountant asap (wait until after April 17 - they're swamped until then). They can advise you on what your responsibilities are when have employees, and who can be treated as an independent contractor and who must be treated as an employee. There are too many requirements to advise you here. But you're already overdue for some things from last year, and need to get this sorted out as soon as possible.

If you just paid people cash under the table last year, and neither of you reported it, both you and they did something illegal.

Answer 2

Not sure on how to answer your question but to tell you to see your tax advisor person.

Also, if you don't report it and the employees did, then you can get into big trouble from the IRS later. Either way, it could be a mess.