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  #1  
Old 08-28-2015, 09:38 AM
Root Drench Root Drench is offline
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Location: South Florida
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Proper way to subcontract?

I started subcontracting for a new company and the owner wants to mark it up in a way I am not used to.

I verbally tell him the price for a job, say $400 a month, and he tells me okay send me an invoice for $500. He then gives my invoice to the customer and has them pay me directly and then I send him the difference (he hasn't specified yet if I give it to him or his company.)

I want to record this properly and not be screwed with extra taxes. I also want to avoid paying him cash in the event of an audit.

Any thoughts? I'm used to invoicing a company directly and then they handle billing, markup and collections with the customer themselves.
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Old 08-29-2015, 10:48 AM
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DJS4 DJS4 is offline
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You are questioning this because you know its not right. Just say no to all of it, he's running some sort of scam. He should be invoicing/dealing with the client, paying you and giving you a 1099 at the end of the year. You keep records on only what you charged him.

Your last sentence is the correct way.

Run!
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  #3  
Old 08-29-2015, 01:46 PM
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easy-lift guy easy-lift guy is offline
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Dee is correct. Your way or not at all.
easy-lift guy
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  #4  
Old 08-29-2015, 07:25 PM
iand iand is offline
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sounds like a pretty good deal you earn $400 and pay tax on $500 he earns $100 and pays tax on nothing all the paper work is in your name and not his anything goes wrong good luck proving his involvement so pretty good deal for him not you i wouldn't touch it at all,do it the way you say at the end of your post or not at all
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Old 08-30-2015, 11:08 AM
allagashpm allagashpm is offline
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You should send him the bill for 400. He sends his own bill for 500.
Pays you 4 and keeps the hundred. It sounds way too complicated and will definitely bite you
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Old 08-30-2015, 01:20 PM
Nunyabisnes Nunyabisnes is online now
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The way he has you doing it, he can claim he's an employee of yours. You pay the taxes and he reaps the benefits of the profit. I'd walk away.
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  #7  
Old 08-31-2015, 10:17 PM
Root Drench Root Drench is offline
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Thanks, I think walking away is the correct answer on this one. I'm in need of the extra work but not this way. Also not much I can do if the customer doesn't pay up since I have no agreement with the customer.

He told me his last pest control guy was unreliable...now I see why.
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