About the $600.00 limitation of payment for nonemployees.

Char N Gone

LawnSite Member
Location
Texas
So according to the U.S. government, if you pay a non-employee such as a guy for labor 600 dollars or more, you must send him a 1099 misc. If I pay someone say 599 then I don't have to send him a 1099 misc and basically keep a record of him on file. Just pay someone 599 in cash or check or card and be done with it.

My question is, is that 600 dollar limitation for the entire tax year or per project? Can I hire the same guy for a different project say five months later and pay him another 599 for labor and still not have to file a 1099 misc for him before the new tax year?
 

puppypaws

LawnSite Fanatic
So according to the U.S. government, if you pay a non-employee such as a guy for labor 600 dollars or more, you must send him a 1099 misc. If I pay someone say 599 then I don't have to send him a 1099 misc and basically keep a record of him on file. Just pay someone 599 in cash or check or card and be done with it.

My question is, is that 600 dollar limitation for the entire tax year or per project? Can I hire the same guy for a different project say five months later and pay him another 599 for labor and still not have to file a 1099 misc for him before the new tax year?
You can only pay one person with one verifying SS number a total amount of $599 per year without having the need of sending the person a 1099, if it reaches $600 or above you must according to federal law send the person a 1099. This is the only way the federal government has of tracking if the tax was paid on the $600 or above.
 

landscaper22

LawnSite Silver Member
Location
South Carolina
Yes, as others have said..per year. The thing I like about this is I have used it to try someone out before I hire them. There are many times I need an extra hand for a one time job like sod or a major cleanup. If I am needing an employee that is a good opportunity to see what all they can do. You have to be careful with this, as contract labor is just that. It is really designed for sub-contract type work where someone has their own business and you contract some work to them. If I pay someone as contract labor I usually get them to drive to the job and use some of their tools etc. The last guy I paid on contract labor did have his own accounts and was a senior in high school. It was easy to get by as I had him drive to a couple of jobs and use his hedge trimmer to trim hedges for me. You can get in trouble if something goes wrong. Just make sure you understand how you can use it and not be breaking laws. Some people don't understand it. Wouldn't be cool if you had one that should be an employee. You fire him, and he files for unemployment or something :laugh:
 

puppypaws

LawnSite Fanatic
Why are we even discussing this?

this is just searching for a way to circumvent the rules and processes of running a proper and legal business.

stop looking for loopholes. Don’t go down rabbit holes.
I'm sorry but did not see the author attempting to circumvent any regulations but instead only asked how the federal regulations concerning 1099's were to be interpreted. What gave you the impression "Char N Gone" was looking for a way to circumvent IRS regulations?
 

TPendagast

LawnSite Fanatic
I'm sorry but did not see the author attempting to circumvent any regulations but instead only asked how the federal regulations concerning 1099's were to be interpreted. What gave you the impression "Char N Gone" was looking for a way to circumvent IRS regulations?
The second paragraph
He clearly understands the limits and is hoping for a way to loophole and exploit.
Everything IRS has to do with a tax year and everyone knows that.

I just the beginning of another thread on how to work around the system and 1099 employees

what if I lease them my trucks?
What if they use their truck?
What if I make them buy their own tools?

all of it is similar in thought process
Don’t ask what if
Just do what your supposed to do without trying “another way”
That’s what leads down the rabbit hole.

if you want to get technical youre not supposed to cash out any employee ever.
It’s supposed to be for people who aren’t employees
So if you cut grass and someone mows for you , that guy gets a w2/w4
If someone moves furniture and paints for you to remodel the office, that’s not your line of work , so that’s where the odd job under $600 comes in.
NOT in your line of work.
The $600 line is a leeway where dol and irs aren’t going to pester with auditing
But if you’re audited for another reason and they catch it, especially if you do it often .... you could owe some back taxes and workers comp.
Again it’s a leeway line, not a rule intended to be used.
 

puppypaws

LawnSite Fanatic
The second paragraph
He clearly understands the limits and is hoping for a way to loophole and exploit.
Everything IRS has to do with a tax year and everyone knows that.

I just the beginning of another thread on how to work around the system and 1099 employees

what if I lease them my trucks?
What if they use their truck?
What if I make them buy their own tools?

all of it is similar in thought process
Don’t ask what if
Just do what your supposed to do without trying “another way”
That’s what leads down the rabbit hole.

if you want to get technical youre not supposed to cash out any employee ever.
It’s supposed to be for people who aren’t employees
So if you cut grass and someone mows for you , that guy gets a w2/w4
If someone moves furniture and paints for you to remodel the office, that’s not your line of work , so that’s where the odd job under $600 comes in.
NOT in your line of work.
The $600 line is a leeway where dol and irs aren’t going to pester with auditing
But if you’re audited for another reason and they catch it, especially if you do it often .... you could owe some back taxes and workers comp.
Again it’s a leeway line, not a rule intended to be used.
How many IRS audits have you dealt with in your business life?
 

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