Isn’t there a law stating that if you want to hire someone to help you do work around the house or on a job site that you don’t have to have them legally tied is an employee, where taxes etc are paid?
If you know any details on this including the code number or name of this law that would help out. Thanks, I have a guy that’s going to help me with some work and he seemed a little ‘un easy’ wondering if I was legit or something. I am its just short term work and its only one temporary employee….
But this law it seems like if its under a couple hundred hours…etc…you’re ok…..details anyone? Thanks so much.
So basically…when is under the table (short term) legal? I dont know this gentlement I did some advertising for ‘real estate’ computer assistance and he was one who replied.
I am paying him $15 an hour and in cash
v_b said:
Oct 15, 09 at 6:28 amThe government goes by the nature of the job.
If you are the employer, it’s wages even if it’s 4 hours on Tuesday.
The IRS is nice, though and says if this is your ONLY employee and you pay them less than $1700 in one year, they aren’t subject to fica/mc and you don’t have to issue a W-2. The money isn’t under the table–cash is okay–and the employee reports it on their income with the code HSH.
http://www.irs.gov/pub/irs-pdf/p926.pdf
If you pay more than $1700 or do withholding, you have to do the W-2 and file schedule H with your 1040.
You are required to get an I-9 and a W-4 filled out. (He still has to have the legal right to work.) To protect yourself, keep a running receipt. Offer to pay by check, but it’s not necessary. (The headache for him is if he is qualifying for EIC or child tax credit because without the W-2, he has to prove he worked. Paying by check helps.)
Stop using the phrase "under the table."
Leo_F said:
Oct 15, 09 at 10:44 amExamples of report amounts paid to independent contractors (in IRS terminology, such payments are nonemployee compensation). The ubiquity of the form has also led to use of the phrase "1099" to refer to contractors themselves. U.S. tax law requires businesses to submit a Form 1099 for every contractor paid at least $600 for services during a year.
tro said:
Oct 15, 09 at 3:44 pmif you pay someone $600 or more in a year’s time you are required to furnish a 1099 M to that person, who is considered an independent contractor
if you do not wish to pay wages and withhold taxes, file your quarterlies or add the tax to your 1040 (household help) at the end of the year, you need to consider some consequences of your actions–
ie if this person were injured on your property, working for you, they could sue you and in the end you could lose your house
this person also might go to the unemployment office seeking some help there, and you not having paid wages and withheld taxes would end up paying it all
you probably need to have him sign something to relieve you of many of the consequences of this activity since you already are apprehensive about it
in hundreds of cases nothing happens, but there is always that ‘one’ time
nojam75 said:
Oct 15, 09 at 9:36 pmNo, there is no law saying it’s okay to not follow employment laws for less than XX hours.
You’re basically ‘contracting’ with the guy (not ‘hiring’) to perform services. You’re assuming that he is an independent contractor who pays his own income taxes and insurance. It shouldn’t be a problem if you pay him less than $600 this year (40 hours @ $16/hour). If it’s more than you’ll both need to obtain each others SSNs and file a 1099.
Of course if he is injured or later claims he is an employee, then you’ll have problems. If you really want to do this legally, you can pay the guy through a payrolling company. The payrolling company will handle all the employment taxes and insurance and will be the guy’s employer. Payrolling can cost 25-50% more than the pay depending on income taxes, workers comp., etc.