Paying contractors via paypal a problem?

Question

Id like to pay my repair guy via paypal to get him paid faster andnot waste his time driving around. He's pretty good about getting me receipts  from a tax records perspective I wouldnt have a check image but i would have a paypal transaction record.  Anyone see any concerns, issues etc.?

David Wedemire · Answer

For payments of under $1,000 you can do email transfers which are quick but then you won't have a record of the transactions. I have used PayPal and as long accounts are verified, the transaction goes smoothly.

Craig Grella · Answer

Kimberly Jones Paypal can take some time when you initially set up the account, but once that's done and you clear your limits, everything is smooth sailing. I did have a seller account flagged by Paypal once and it was a PAIN to get reinstated. You want to avoid that too.

Kimberly Jones · Answer

I have heard horror stories about using paypal. Some say they wait weeks for payments. 
You could just set him up as a payee/bill if you use online banking. I pay thousands out to some of my helpers and doing it through my online banking enables me to simply pull up their history at the end of the year.

Craig Grella · Answer

I'm not sure how you have your paypal account setup or how he has his setup, but I'm just thinking of the 2.9% hit he's going to take by accepting a paypal payment.

If he's willing to take that kind of hit, maybe offer him 2% less on the payment, save yourself a few bucks, and cut him a cashiers check.

Mark Updegraff · Answer

You'll need to 1099 him if you pay him more than $600 (i believe) per year.  I don't see a problem with paypal.

Cheers,
Mark