Need Business Advice

[wolf12339]

I have been unable to find a quality employee to hire and so to help out my current employees we have been getting day laborers and paying them out of our petty cash fund. My question is can I use this as an expense to write off and if so what do I code it as? What would you list the expense as for accounting purposes? I don't want to be paying in cash and then not be able to list it as a company expense.


Thanks!!

[Freelancier]

Did you get your laborer's social security number? (I'm assuming you're in the USA). Basically, if you claim it as a labor expense and they're self-employed, you have to track to see if you spend $600/year on them and if so, you are required to report it to the IRS. Did you get a receipt for the money? Do you have actual proof you paid a person for services rendered?

As for what you should code it as, you should chat with whoever does your taxes to see what account they want you to credit (obviously, the cash account is the one you would debit).

[chrismarklee]

You stated he 1099 Rule correctly . On labor over $600.00 per year you you need a W-9 from the person and send them a 1099