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TheBeachHouse

TheBeachHouse

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We found a good cleaning service.
We didn't want to start a payroll and we didn't want to go cash but we did want a reliable housekeeper.
So we found a cleaning service. She or her staff will come every day in the summer and on call in the winter and agreed to a good hourly rate and the fact that some days have more hours than others. She has done chambermaid type work in the past, so understands the way it works. We like her. She is enthusiastic. And she will present us with a bill so we are paying for a service from her small business.
Win-win!
 
Sounds good! Make sure you get a certificate of insurance from her and that she and her employees are bonded.
You will need to file a 1099 for taxes next year.
 
Morticia said:
Sounds good! Make sure you get a certificate of insurance from her and that she and her employees are bonded.
You will need to file a 1099 for taxes next year..
Click to expand...
re: 1099 -- unless her business is incorporated. In any case, probably want to have her fill out a W-9 form (that's the way you collect her tax ID number in case you do have to file an information return).
 
Morticia said:
Sounds good! Make sure you get a certificate of insurance from her and that she and her employees are bonded.
You will need to file a 1099 for taxes next year..
Click to expand...
we view it the same as paying the plumber. it's her small business. she gives us a bill. we didn't 1099 the plumber or contractor. we wouldn't 1099 the Merry Maids. We just pay the bill.
That was the whole idea of finding a service, rather than hiring a person.
 
TheBeachHouse said:
Morticia said:
Sounds good! Make sure you get a certificate of insurance from her and that she and her employees are bonded.
You will need to file a 1099 for taxes next year..
Click to expand...
we view it the same as paying the plumber. it's her small business. she gives us a bill. we didn't 1099 the plumber or contractor. we wouldn't 1099 the Merry Maids. We just pay the bill.
That was the whole idea of finding a service, rather than hiring a person.
.
Click to expand...
Yep, understood. We have done similar. But the fact remains, as a business, "The basic rule is that you must file a 1099-MISC whenever you pay an unincorporated independent contractor-that is, an independent contractor who is a sole proprietor or member of a partnership or LLC-$600 or more in a year for work done in the course of your trade or business." (from Nolo).
If the entity you are making the check out to has "inc." (or similar) in their name, you are all set, otherwise there is a small risk that goes with the convenience of skipping the formalities. If there is no "inc." (or similar) in the name, you could always look up the entity on your state database to see whether they are a corporation or other form of business.
And still, your insurance agent would be happier knowing that you collected that certificate of insurance. Again,there is some small risk that goes with the convenience of skipping the formalities, and you may well decide that the risk is acceptable. Many small businesses do.
 
If the plumber is paid more than $600 in a year, the IRS wants to know they got that income. 1099.
If you want to deduct what you pay them as a business expense, you better follow the rules.
 
Harborfields said:
TheBeachHouse said:
Morticia said:
Sounds good! Make sure you get a certificate of insurance from her and that she and her employees are bonded.
You will need to file a 1099 for taxes next year..
Click to expand...
we view it the same as paying the plumber. it's her small business. she gives us a bill. we didn't 1099 the plumber or contractor. we wouldn't 1099 the Merry Maids. We just pay the bill.
That was the whole idea of finding a service, rather than hiring a person.
.
Click to expand...
Yep, understood. We have done similar. But the fact remains, as a business, "The basic rule is that you must file a 1099-MISC whenever you pay an unincorporated independent contractor-that is, an independent contractor who is a sole proprietor or member of a partnership or LLC-$600 or more in a year for work done in the course of your trade or business." (from Nolo).
If the entity you are making the check out to has "inc." (or similar) in their name, you are all set, otherwise there is a small risk that goes with the convenience of skipping the formalities. If there is no "inc." (or similar) in the name, you could always look up the entity on your state database to see whether they are a corporation or other form of business.
And still, your insurance agent would be happier knowing that you collected that certificate of insurance. Again,there is some small risk that goes with the convenience of skipping the formalities, and you may well decide that the risk is acceptable. Many small businesses do.
.
Click to expand...
Harbor - very helpful. Thank you.
 

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