what happens if someone of the subcontractors turns out to be illegal, meaning no SSN? How can this affect me and how will I file my tax returns next time?
2007-04-23 09:58:12 · 4 answers · asked by issark 1 in Business & Finance ➔ Small Business
You are required to collect SSNs from your independent contractors, unless you expect to pay them less than $500 a year. If you pay anyone (a person or a company) more than $500 a year, you need to send them a Form 1099 at the end of the tax year, and that form has to have their SSN on it...
2007-04-23 10:56:20 · answer #1 · answered by NC 7 · 1⤊ 0⤋
If you are using them as subcontractors they need to supply you with the proper documentation so you can file a 1099 on them. Your job is to make sure that you have the proper documenation incase you are audited. Remember, you are an entrepreneur...not the INS. Be aware that a small business that reports a lot of 1099's that never show up on anyone's personal tax return (i.e., bogus SSN) is a trigger for an audit. Good luck.
2007-04-23 17:08:49 · answer #2 · answered by goiuhoosier 1 · 0⤊ 0⤋
If everyone is subbing from you, then are you giving them an I-99 and not taking out taxes? That is the way that I see people get away with with the illegals around here that are roofing. Just give'em an I-99 that your accountant prepares for you, and you just write it off as a business expense. But don't take out ANY taxes, and don't pay ANY workmans comp. Have them get a CNC (certificate of non-coverage) before you will let them sub.
2007-04-23 17:05:08 · answer #3 · answered by lithiumjuice 2 · 0⤊ 0⤋
well you can cover yourself by asking your subcontractors to start showing proof of eligibility to work in the states and photocopy them and then keep them on file
2007-04-23 17:03:15 · answer #4 · answered by robert a 1 · 0⤊ 0⤋