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Taxes for small contract work (self.freelance)

submitted ago by castek

I'll be filming an event soon where I'll need two other cameras operators, I'm paying them around $200 each.

When I pay them, do I have to do anything special regarding taxes of other fees? Since the amount is so small is it legal to just pay them "under the table"?

Also when I pay my taxes do I include the $400 for them under mine? Sorry if these are basic questions, I'm new at all this.

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[–]postmodgirl 1 point2 points ago

In theory you should be paying taxes on your income, although if you're not making much (like under a couple thousand) I don't think it matters. Still though its better to start out doing business properly vs having to change your prices, & it'll seem to your customers like you're giving them a price hike. You have to look up the laws and practices for what you're selling.

[–]castek[S] 0 points1 point ago

Yeah, I understand that I pay taxes on my income, I do, and plan for that when setting the price. My question is, do I pay taxes on the amount I give to the people that work for me? Or are they responsible for that amount? Also since they're contract workers do I have to supply them with a tax form?

I live in California

[–]postmodgirl 1 point2 points ago

I'm not an accountant, and those are questions for one :)

[–]jackdempsey 0 points1 point ago

IANAL/A but some general tips:

  • what you pay out is an expense. That will lower your taxable income. Imagine grossing $100 but paying out $100, netting $0. Paying any tax would be a bit harsh, right?

  • Generally if it's under $600 you don't have to give them a 1099-MISC

  • they will pay taxes on any amount earned, even $10. If they earn more than $400 they'll probably have to pay self-employment tax.

All of this is public knowledge, you just have to google a lot and spend time learning it. Takes time though, and if your situation gets complicated it's worth using an accountant, especially in CA as we love our laws here :-)

[–]castek[S] 0 points1 point ago

Thanks so much, that's basically what I thought, just wanted to get it confirmed. Really appreciate it!