Labor Cost receipts? - Tax strategy?

[CalRehabber]

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

Hey you guys that use unskilled labor, how do you handle your labor cost receipts so that they will pass an IRS audit if it happened? Is a receipt book with a signature and amount paid out enough or would more info be required?

Anyone even go through an audit with this as an issue?

I know that the max is $600 per laborer before a tax event is triggered but sometimes I use many different laborers for less than $600 at a time..

Thanks!

---Mike

 

[tranquility]

I suggest an accountant. You are almost assuredly an employer. The $600 has to do with independent contractor reportings. You are employing people. You are at risk of many tax issues and worker's compensation issue as well as other legal requirements. All a signature on a ledger will do is give evidence against you if something happens.

 

[CalRehabber]

I already consulted my accountant, they said to do exactly what I am already doing, just trying to get a 2nd opinion from someone else who has or is doing this.

I am also trying to find out if it's for less than $600, not more...

I suggest an accountant. You are almost assuredly an employer. The $600 has to do with independent contractor reportings. You are employing people. You are at risk of many tax issues and worker's compensation issue as well as other legal requirements. All a signature on a ledger will do is give evidence against you if something happens.

 

[Silverplum]

I already consulted my accountant, they said to do exactly what I am already doing, just trying to get a 2nd opinion from someone else who has or is doing this.

I am also trying to find out if it's for less than $600, not more...

Hire a *competent* accountant.

 

[FlyingRon]

As pointed out, hiring guys off the street doesn't make them magically into independent contractors. If you tell them where and when to work, provide tools, etc... then you are an EMPLOYER not a contractor. Nobody can give you the answer on how to handle this in the right way because it is illegal to do what your doing regardless of how many others are doing it as well.

 

[CalRehabber]

Now I know why I really dont like posting here again..

More bashing please

 

[FlyingRon]

Now I know why I really dont like posting here again..

More bashing please

We're not bashing, we're just telling you what the law is. I'm sorry you don't want to hear the truth, but this isn't the "how do I break the law and get away with it forum."

 

[davew128]

Poster FAIL.

 

[CalRehabber]

it is illegal to do what your doing regardless of how many others are doing it as well.

You are not reading the original post.. I never said I was hiring an illegal did I?, you can assume what you like but don't say I'm doing something illegal when I am not and please read the entire post before even commenting like this.

Last I heard it is legal to hire some one to do labor and if it is under $600 you don't need to 1099 them? That is what I am doing and didnt say anything else otherwise.

Professional posters do no reply to my post, I only want to hear from someone who is actually doing rehabs like myself.

Your probably a professional poster if you have more than 500 posts, good for you...

 

[Zigner]

Your clearly an idiot and not reading the original post.. I never said I was hiring an illegal did I?, you can assume what you like but don't say I'm doing something illegal when I am not and please read the entire post before even commenting like this.

Last I heard it is legal to hire some one to do labor and if it is under $600 you don't need to 1099 them? That is what I am doing and didnt say anything else otherwise.

Professional posters do no reply to my post, I only want to hear from someone who is actually doing rehabs like myself.

Your probably a professional poster if you have more than 500 posts, good for you...

You are soooo totally missing the point.

You are speaking as if the people you hire are contractors. However, from your description of what you are doing, they are employees. You are misclassifying them in order to avoid paying the proper taxes, insurance, etc. That is ILLEGAL.

 

[LdiJ]

Your clearly an idiot and not reading the original post.. I never said I was hiring an illegal did I?, you can assume what you like but don't say I'm doing something illegal when I am not and please read the entire post before even commenting like this.

Last I heard it is legal to hire some one to do labor and if it is under $600 you don't need to 1099 them? That is what I am doing and didnt say anything else otherwise.

Professional posters do no reply to my post, I only want to hear from someone who is actually doing rehabs like myself.

Your probably a professional poster if you have more than 500 posts, good for you...

You are hearing from tax professionals. IF someone is a valid independent contractor then you do not have to issue them a 1099 if you pay them less than 600.00 in a given calendar year. However, you do have to have a record of whom you paid and why you paid them.

What we are saying is that the people you are hiring do not appear to be eligible to be considered independent contractors and therefore you are supposed to be treating them as employees, with proper withholding etc and a W2 at the end of the year. Just because they are day labor does not classify them as independent contractors.
A day laborer can be an independent contractor if they meet the definition of an independent contractor, but those you are hiring do not appear to meet that definition.

Read this article/watch the video for some clarity on the subject:

http://www.irsvideos.gov/properworkerclassification

 

[CalRehabber]

No, you are wrong and you are missing the POINT, I KNOW ITS ILLEGAL TO HIRE SOMEONE FOR OVER $600 OR ILLEGALS, BUT DID I SAY I WAS??? NO! READ THE FRICKEN OP for gods sake!!.

And, when was it illegal to hire someone for less than $600 and not have a tax event?? It's not!!! and I never said otherwise!

If you were a Rehabber or maybe knew about reel Estate, you might know this.

And yes, I am speaking to people in the REEL ESTATE FORUM like they are into Reel Estate, shouldnt they be????? WTF?

If your a Professional Poster, like I said, please stay out of my post, my whole post is just fricken polluted now, thanks..





'

You are soooo totally missing the point.

You are speaking as if the people you hire are contractors. However, from your description of what you are doing, they are employees. You are misclassifying them in order to avoid paying the proper taxes, insurance, etc. That is ILLEGAL.

 

[TheGeekess]

No, you are wrong and you are missing the POINT, I KNOW ITS ILLEGAL TO HIRE SOMEONE FOR OVER $600 OR ILLEGALS, BUT DID I SAY I WAS??? NO! READ THE FRICKEN OP!!.

When was it illegal to hire someone for less than $600 and not have a tax event?? It's not!!! and I never said otherwise!

If you were a Rehabber or maybe knew about reel Estate, you might know this.

And yes, I am speeking to people in the REEL ESTATE FORUM like they are into Reel Estate, shouldnt they be????? WTF?

If your a Professional Poster, like I said, please stay out of my post.

My God...




'

Then mayhaps you should do whatever your accountant says and hopes he/she/it doesn't get you into trouble with the IRS. Because he/she/it won't be paying, you will.

 

[Zigner]

If you "hire" someone as an employee, then the amount you pay them is irrelevant. I don't know why you are so thick-headed about this. Do as advised and read up as to what constitutes an employee. I suspect you won't, though, because it's not what you want to hear.

ETA: I really don't know why you think anybody accused you of hiring "illegals" (ie: Undocumented Workers) - you are being told that it is illegal to treat an employee as an independent contractor if they don't meet the criteria.

 

[CalRehabber]

if you "hire" someone as an employee, then the amount you pay them is irrelevant. I don't know why you are so thick-headed about this. Do as advised and read up as to what constitutes an employee. I suspect you won't, though, because it's not what you want to hear.

Eta: I really don't know why you think anybody accused you of hiring "illegals" (ie: Undocumented workers) - you are being told that it is illegal to treat an employee as an independent contractor if they don't meet the criteria.

A person being paid under $600 doesnt need a 1099, I never said I was paying anyone over $600, READ MY ORIGINAL POST!!!
someone please lock my post before i go postal in here, my god

I'm sure you professional psoters know everything but please read the entire post before commenting..is that too much to ask???

I ONLY want to hear back from Rehabbers or Reel Estate people PLEASE!