I am a 1099 contractor for a company and want to have my step-dad work with me. What are the tax implications of this? Any help would be greatly appreciated.

#1:Your step-dad can join you as an IC too as long as your ER(the company) hires him as an IC; he, as a contractor, needs to file his Sch C as long as the amount on line 29/ 31 on Sch C is $400 or exceeds $400 and also as long as the amount on liner 2/ 3 on Sch SE is also $$400 or exceeds $400 , then he needs to pay self employment tax, SECA tax. He can deduct 50% of the SECA tax on his 1040; if he is filing as a sole proprietor, and/or a self-employed individual, he generally has to make estimated tax payments if he expects to owe tax of $1K or more when he files his return.HOWEVER,he does not have to pay estimated tax for the current year if he had no tax liability for the prior year ; he was a U.S. citizen or resident for the whole year ; his prior tax year covered a 12 month period.

Sorry, I need to clarify. We would be working as a team with me as the 1099 IC and I would be paying him directly. Can I do this and how would we file. Thanks again!

[quote=bogaridy;13071]
#1: We would be working as a team with me as the 1099 IC and I would be paying him directly.

#2:Can I do this and how would we file. QUOTE]

#1:Would you pay your step-dad as your EE?? Or as a contractor working for you?? As long as you ‘d pay him as your EE, you need to issue him a W2; if you ‘d pay him as a contractor, then you can deduct your expenses on yur Sch C line 11 and he , as said previously, needs to file his own Sch C/Sch SE of 1040 as long as his net earnings is $400 or exceeds $400. In this case, you need to issue s him a 1099MISC and you also need to submit a copy of 1099.1096 to the IRS by Feb 28 2014. When you have an independent contractor/ or a sub contractor working working for you, the amount that you pay him in the course of a year determines whether you have to issue 1099 form. According to the IRS, you must issue a 1099 form if you paid an independent contractor more than $600 in the year.


#2:As mentioned above

So, I want him to do this 1099 contracting job with me as the one being paid from the company I am contracted with and him being paid directly from me. Do I pay taxes on all we make and then him have to be taxed on what I pay him. We will basically be splitting my income from this company I am contracting with. Thanks again.

#1:As long as you pay him( as long as he is a contractor, NOT your employee, he needs to file his Sch C as said previously), you need to issue him a 1099 and you can deduct his pay on your Sch C line 11, and he needs to report the income that you pay him on his Sch C. Please read the previous post for sure.

#2: Not being taxed twice; no body is subject to double tax. As said, you pay him and you ‘d deduct his pay on your Sch C as your biz expenses and he needs to report the income that he receives from you on his Sch C as income.