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Posted by mrsgator88 on October 19, 2006, 11:10 pm
> I'm having a major renovation done and am contracting it out myself.
>
> Are the subs more or less on the honor system to report the income
> derived from my project or should I report via 1099-misc or some other
> form.? If that's a possibility and I decide to do so, will they all
> run away, far away.
>
If you hire a sub and you're telling him what to do, how to do it, and when
to do it, and if they in any way fall under the umbrella of your insurance
coverage, they MAY be considered an employee. Even if he is incorporated.
You need to ask your CPA or post in an appropriate accounting forum where
CPAs will answer. Nobody who has responded here is a CPA, and just because
they do it a certain way or they've been doing it for xx years means nothing
when YOU get audited.
S
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Posted by carolyn on October 20, 2006, 6:32 am
jam6444@yahoo.com wrote:
> I'm having a major renovation done and am contracting it out myself.
>
> Are the subs more or less on the honor system to report the income
> derived from my project or should I report via 1099-misc or some other
> form.? If that's a possibility and I decide to do so, will they all
> run away, far away.
I don't know about the regs in your area, but as I understand them here, in
Ontario, I am legally responsible for ensuring that subcontractors are
covered for insurance, taxes, and so forth. The general rule is to ensure
they have a GST (Goods and Services Tax), which they can only get if they
are a registered business. If they don't have one, they are not a
legitimate business, and you may be held legally responsible for worker's
compensation (workplace insurance), and income tax.
If you want to hire someone you can either ensure they are set up as a
business, report their earnings, or hope everything will turn out just
fine. Which you choose is up to you.
Carolyn
--
Carolyn Marenger
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