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magicman
04-29-2009, 01:48 PM
As some of you may now from other posts, but also my name here, I am a magician.

My question is, if I want to use an assistant in my shows how do I pay her?

I don't see myself doing more than 5 shows a year that require an assistant, and would probably not have the same one each time.

How do I handle paying an assistant? I know not everyone would have the same situation, but any insight would be of help.

Can I just pay cash, do I have to withhold anything, etc? If I pay cash is it up to her to pay taxes on it?

SimplyBRG
04-29-2009, 02:05 PM
I suppose you could hire an assistant as an independant contractor. You can pay her cash or check, I don't think it matters. Just keep track of what you paid and issue a 1099 at the end of the year.

You might also want to make sure your insurance covers independant contractors. You don't want to get sued by an independant contractor and not have insurance. Likewise you don't want to be sued by someone who might be injured by an independant contractor during a show. I don't know anything about your show but injuries can happen anytime. I know of a comedian who threw rolled up t-shirts into the audiance during his show. One of the t-shirts hit a light fixture which then broke and fell down on an audiance member's head, causing serious injuries. I don't know if the comedian was sued or not, but it he was I bet he wishes he had insurance.

vangogh
04-29-2009, 04:21 PM
Again I'll advise you to check with your department of state or an accountant and take everything I say with a grain of salt.

My guess is most people in your situation would pay cash and neither you nor the assistant would ever report the transaction to the IRS. Technically that would be wrong, but I'm guessing it's what generally happens.

In order for someone to be considered a contractor there are guidelines that must be met. Usually the contractor would need to perform similar services for others and own any equipment they specifically need for their job. If you hire someone who only does this for you they would probably be considered an employee which requires much more on your part in terms of taxes.

If they can qualify as a contractor then you would issue them a 1099 and they would use that when they fill out what their wages are.

The idea for insurance is a good one.

Here's something I found on the IRS site to help determine is someone is considered a contractor or an employee (http://www.irs.gov/businesses/small/article/0,,id=99921,00.html). You may want to contact your local SBA office ( http://www.sba.gov/). They'll probably have better answers for you then we will.

cocoy
04-29-2009, 05:43 PM
What they said. Also check about worker's comp.

Evan
04-29-2009, 10:23 PM
I think you could justify this as an independent contractor type of relationship. With this, you wouldn't withhold anything and could just write the contractor a check. (While you could give cash -- you really should keep a paper trail and start to maintain at least SOME business formalities.)

If you pay more than $600 per year, you need to collect their social security number or EIN (see form W-9), and file a 1099-MISC for their "nonemployee compensation".

vangogh
04-30-2009, 01:16 AM
Evan what do you think justifies this as an independent contractor? My gut tells me it could be too, but based on what I've read I don't know if it meets the requirements. From the little I've read I was under the impression that a contractor really needs to be self employed and be set up to provide work for more than one company. Then again I can think of a number of times where a contractor wouldn't meet those requirements and still be a contractor.

Patrysha
04-30-2009, 01:24 AM
I think it would be the occasional nature of it, kind of like parents paying for a babysitter for a night out. (Not for daytime childcare, that's a slightly different beast)

Though the sitter may work for other families...they may not. Either way you pay out the same way for an occasional service. At least that is my uninformed guess.

vangogh
04-30-2009, 01:34 AM
That makes sense. Some of the rules about employee/contractor seemed complicated to me when I read them. My gut does tell me that this would be a contractor relationship, but I'm not sure.

Evan
04-30-2009, 12:00 PM
Evan what do you think justifies this as an independent contractor?

I am very skeptical that the IRS would look into this. Even if they did, you could even try to argue that a common-law partnership existed if these two worked together for magic shows. That effect is very much the same as both end up having self-employment income.

But let's say that didn't fly.


Control. Sure, this could be a bit iffy. But a lot of contractors certainly have specifications that need to be met. Let's face it, if I hired another landscaper to do work even though I am a landscaper myself -- I expect that they are doing it during a reasonable time for my customer.
Financial. Contractors generally have to make their own investment, but not always. Sometimes their own time is sufficient. ALSO, how this person is paid is very important. Are they paid an hourly wage (which would be an employee)? Or are they paid a flat-rate for the work? Say $100.00 for the night, whether it's one hour or five. If that's the case, that would support an I.C. relationship.

I have seen very iffy independent contractor/employee type engagements.

If he hires a person for $100.00 to be used in this show and does that a few times in a year -- I'd have a difficult time figuring out why he should be classified as an employee.

vangogh
04-30-2009, 12:58 PM
Thanks. Makes sense. I couldn't see the IRS looking into this either.

Guess I'm remembering back a few years when I last read about this stuff. I forget why I was looking into it, but I remember being a little confused and thinking the rules made it sound like you really had to jump through hoops to be called a contractor.

In magicman's case it sounds like the hourly vs flat rate could be the deciding factor.

magicman
04-30-2009, 01:46 PM
I would be paying a flat rate per show, just like I get paid for a show.

vangogh
04-30-2009, 04:57 PM
I think you should ignore what I said here and take everyone else's advice. Sounds more like a contractor relationship. Keep records of what you pay so you can fill out the 1099 at the end of the year.