Diverting employee payments through another party?

[BrutalGT]

What is the name of your state (only U.S. law)? Florida

I live in Florida and work for a online company that is based out of Sweden. We have employees in both the US and various countries in Europe, however one staff member from France cannot provide proper legal invoices (unless he registers himself as a business). As that is the case, we have been unable to schedule him due to this.

It has been suggested that as a temporary solution over the next few months, the company includes his payment into my own, then I pay him his salary based out of that. So essentially instead of X$, I am paid X$ + Y$ and send him Y$.

My concern is over how this will affect my taxes when filing next year. Is there any way to handle this correctly?

 

[LdiJ]

What is the name of your state (only U.S. law)? Florida

I live in Florida and work for a online company that is based out of Sweden. We have employees in both the US and various countries in Europe, however one staff member from France cannot provide proper legal invoices (unless he registers himself as a business). As that is the case, we have been unable to schedule him due to this.

It has been suggested that as a temporary solution over the next few months, the company includes his payment into my own, then I pay him his salary based out of that. So essentially instead of X$, I am paid X$ + Y$ and send him Y$.

My concern is over how this will affect my taxes when filing next year. Is there any way to handle this correctly?

That is a bad idea. It will cause you tax complications. I wouldn't touch it if I were in your shoes.

However...answer one question. Are you actual "employees" or subcontractors? Do you get a W2 at the end of the year or a 1099-Misc?

 

[BrutalGT]

Hi, thanks for the quick feedback! As of right now we are considered contractors, although we are working to open up a legal extension of the company in the near future so US citizens can be actual employees, even though this is not the case currently.

 

[LdiJ]

Hi, thanks for the quick feedback! As of right now we are considered contractors, although we are working to open up a legal extension of the company in the near future so US citizens can be actual employees, even though this is not the case currently.

You would have the same problem that the parent company has. How can you pay the subcontractor in France if the subcontractor cannot provide invoices to you? Do you want to pay regular income tax and self employment tax on the subcontractor's pay?...because that is what will end up happening.