tax deductions of worker who are not licensed contractors

[Robert Baker]

i have an LLC and i purchase about 8 rental properties per year. 2015 was my fist year in business. I originally did the majority of work on the properties my self in the evening and weekends as i have a regular full time job about 50 hours per week getting off around 5 pm monday-friday. To try and turn properties faster i have been paying my son $12 an hour cash and allowed him to bring in one friend who is working for $10 an hour cash. The current property is the first one i have done this on and the billing hours is around 400 for this project. My question is how can i write off this $4000+ expense, i read on this site 1099. is that accurate. I would like to continue using them without them falling under the employee umbrella. We are located in the state of Maryland.

[Beth L.]

You have them each fill out a W-9 and have them invoice you for the work performed. It would be wise to pay them by check so you have record of payment. Then you give them each a 1099 for payments made in that year. It doesn't matter if they are licenced or not, it is only to report money paid to someone else for services in the course of business. In turn, those paid will have to report it on their taxes and pay taxes on the income.

You still have time to do this for tax year 2015, as the 1099s are not due to be postmarked until January 31.

* Disclaimer: I am not a CPA or tax consultant. You should of course consult your CPA for all tax questions.