So I have been in the habit of finding a local handyman near each of my properties and I have them do work for me (mow the yard, clean gutters, etc.) 2 of these guys are under the $600 limit for sure. 4 other guys I have hired have helped me with the two rehabs I have been doing since September. One guy I have paid just over $2k and the other three are a bit under $1k.
Is it going to be audit city if is just claim 4 guys for $600 and 2 guys for less? I would eat the other expenses. 2 of the guys I hire are homeless and living at a men's shelter. no way in heck I would ask for their SS # and send them a tax bill.
I'm sure people do this all the time, and get away with it, but I would guess those who get caught have a mess.
My suggestion is to hope you make through tax time and drop your homeless guys. Its great you're helping them out but I wouldn't risk my business because I wanted to save money on guys who were desperate to take a lower rate.
@Judd Campbell while people do this all the time, and get away with it, you should read this post I wrote. I wish you well, but think you are risking all your assets.
@Jeremy Tillotson The poster is not in California. In Kentucky, where @Judd Campbell claims to be from, you need to look at Kentucky laws. From http://www.lrc.ky.gov/statutes/statute.aspx?id=32535 :
342.650 - Exemptions of particular classes of employees from coverage.
The following employees are exempt from the coverage of this chapter:
(2) Any person employed, for not exceeding twenty (20) consecutive work days, to do maintenance, repair, remodeling, or similar work in or about the private home of the employer, or if the employer has no other employees subject to this chapter, in or about the premises where that employer carries on his or her trade, business, or profession;
Updated over 3 years ago
Disclaimer: I am not a resident of KY. Seek professional help if you have questions regarding applicability of your state laws to your particular work scenario.
phew! @Jeremy Tillotson you had me worried about hiring the tenants kid to mow the yard after reading that link!
even over the Christmas break when I was there most days I only hired guys about 4 days a week.
I am back to just Saturdays now.
Know the law and follow it.
Protect yourself and your asset, always.
Follow the advice of your attorney and CPA, not friends and family.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.