Hiring workers and taxes

[CalRehabber]

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

From time to time I will hire family or friends to help on my Rehab projects.

These are usually just for a day or so and it usually amounts to less than $500

Can I also use this cost when figuring out my tax liabilities.

No 1099 involved in this.

 

[tranquility]

The requirement is per year, not per job.

As long as you can prove you paid them, and the amount did not require a 1099, you can deduct it. (Sometimes even if you didn't issue the 1099 although that is changing.)

But, if you ARE audited, without issuing a 1099, you will also have a little higher hill to climb as to if they are independent contractors rather than employees. Since I suspect they should be classified employees, trying to climb that hill will be costly.

 

[HomeGuru]

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

From time to time I will hire family or friends to help on my Rehab projects.

These are usually just for a day or so and it usually amounts to less than $500

Can I also use this cost when figuring out my tax liabilities.

No 1099 involved in this.

**A: the IRS does not like cash deals unless you have everything documented.