I have a theoretical question for everyone. I haven't done this, but figured that some of you have experience with it, so you may have some insight. Is it legal to pay someone cash for helping you out (even if it is a significant amount, i.e. over $600) and is that acceptable to the IRS? I mean if you do that, I guess you have 2 options. One is to give the person a 1099 as a subcontractor (though technically they are supposed to have their own business with their own insurance to be considered a subcontractor) at the end of the year. or Two, pay them straight cash (or check) and not claim that money that you paid them as a deduction with the IRS. Or can you? I know companies that pay people cash/check, but don't take out taxes and don't 1099 them at the end of the year, so they technically have no employees, but how do they do this legally? What do you all do?