He is legal and we are in the state of Oklahoma.
Would a form typed by me stating that he will be responsible for his claiming and own taxes at the end of the fiscal year be correct? and keep me safe.
2007-05-21 16:19:44 · 6 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
Unless he is an "Independent Contractor" you are responsible for making sure the taxes are paid. Check your State and local labor and tax laws regulating what or how a worker can be classified as an Independent Contractor.
Otherwise to keep yourself and him safe pay him by check, take out his taxes, and keep a record of it. Then let him know where the nearest check cashing place is located.
2007-05-21 16:37:36 · answer #1 · answered by Buster 2 · 1⤊ 0⤋
Depending on his job, he might be eligible to be considered as an independent contractor. That requires a number of things with the job itself - see http://www.irs.gov/govt/fslg/article/0,,id=112718,00.html
If he can be considered an independent contractor, then you would have to provide him with a 1099-MISC at the end of the year showing his income, instead of a W-2. You would still report his income to the IRS, just not take out taxes. If that's the case, he'd fill out a W-9 now, not a W-4 form. And you would still pay him by check, not cash, so you have proof of payment - you just wouldn't withhold taxes from him.
I'd guess that's not what he's asking for, since it would most likely cost him MORE in taxes. Sounds like he's just trying to evade taxes - if you go along with it, you're guilty of tax fraud right along with him.
If after reviewing the link above you feel his job is that of an independent contractor, not an employee, then talk to him, tell him that he needs to fill out the W-9 and that he'll receive a 1099 for his income at the end of the year and see if he's still as eager for the change. Otherwise, just say no.
2007-05-22 10:38:20 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
You are the boss, he is the employee. Tell him it is company policy that you do not pay in cash. The fact that he wants his money in cash sounds shaky, I cannot think of one non-fraudulent reason why he would want this. Protect your own a$$ets, don't take a chance on this guy. You have your own business and I know you know this.
2007-05-21 23:32:24 · answer #3 · answered by Princess Leia 6 · 0⤊ 0⤋
If he is an employee or independent contractor, he gets paid the way you want him to be paid.
F90= him! You get audited, you want a cancelled check. Let them go to a bank and cash it.
2007-05-21 23:45:42 · answer #4 · answered by TedEx 7 · 0⤊ 0⤋
NO! You are responsible for the taxes of your own business! Don't let this guy screw you over! IRS Trouble is the worst!
2007-05-21 23:28:05 · answer #5 · answered by Brian H 2 · 2⤊ 0⤋
Pay with a personal check. This way you have proof and cover your end. And it's as good as cash for your employee.
2007-05-21 23:27:16 · answer #6 · answered by LPE213 1 · 0⤊ 2⤋