If/when I ever do a rehab, I would like to “employ” my brother to help with various aspects of the rehab. I would like to pay him under the table if possible. What concerns or problems would arise from doing this? I would like to be able to include what I pay him in the expenses for the rehab, but if I do that, then I’m guessing that would raise a red flag to somebody, correct?
If I form an LLC or some other type of entity and pay him above board, what type if any taxes would I need to deduct from his check? Would it be his responsibility for all taxes?
I don’t want to do anything illegal, so I would appreciate any and all advice on this subject.
Have youre btrother start his own company, or hire him as an independent contractor (there are some rules that apply tio ensure he is really independent and not an employee).
You can then pay him and deduct the costs just as if you hired a contractor to do the work. If he is an independent contractor you will have to issue him a 1099 at the end of the year to account for the costs. He will be responsible for all taxes.
If you form a LLC and hire hima as an employee you will be responsible for witholding Federal Income, Social Secutrity (employee portion), state unemployment, and state disability insurance/taxes. You will eventually have to send these to the respective agencies collecting the taxes. Additionally you will be responsible for paying the employer portion of Social Security taxes
Wow jmd I was going to answer that on the other hand I was going to say that exact same thing so I guess there is no need!! GREAT ADVICE!!
Thanks for the advice guys. Geez the government never makes anything easy.
I’m not talking about paying him big money. Maybe just helping with the demo and a few other little things. So I guess the easiest thing would be to give him a few bucks and not try to claim what I pay him… assuming I ever even do a rehab.