Can I write this off as a business expense?

Kyle787 · Sep 9, 2011

Well thanks to BHW, I've opened a webdesign and SEO company. I have clients who all want logos done as well. I am proficient with Photoshop/Illustrator, but i just don't have the time because I am a full time student trying to go to class and make & rank 2-3 sites a week.

If I hire an old friend for freelance work (NOT on my payroll) I know I can write it off as an expense but what do I need to do to cover myself? Can I just give him a 1099 and whether or not he reports it is up to him?

BassTrackerBoats · Sep 9, 2011

You'll need to give him a 1099 when he hits the 600.00 threshold... under that it is on him.

Keep clean records for sure though.

Hire a bookeeper to set things up for you tax wise.. it should only be about 200 - 250 and your backside will be covered.

idream · Sep 9, 2011

I've written off contractor costs in the past, but I do use an accountant to make sure I'm doing everything correctly. It costs me just over $250 and you can usually write off the preparation fees the following year.

jonnyquest · Sep 11, 2011

all good advise from others ... if this gets to be serious money I would get QuickBook for business (not Quicken) ... you can do all that stuff and email the info to the tax prep people and you are done and drinking margarita's on a beach in Costa Rica.

...have a great time in your new business

JQ

Rubix101 · Sep 21, 2011

Hell yes you can write that off. Give him a 1099 and claim it. As long as you do that you'll be fine.

iiaok · Sep 21, 2011

Seriously, if you're running a LEGIT business, don't ask tax questions here. While you might get the right answer, you need to know what you're doing with your money.

Ask an accountant these types of questions. And find out his source of info, because even they can get it wrong. And at the end of the day, it's your ass on the line if an audit comes your way.

volund · Sep 21, 2011

Rubix101 said:
Hell yes you can write that off. Give him a 1099 and claim it. As long as you do that you'll be fine.

idream said:
I've written off contractor costs in the past, but I do use an accountant to make sure I'm doing everything correctly. It costs me just over $250 and you can usually write off the preparation fees the following year.

iiaok said:
Seriously, if you're running a LEGIT business, don't ask tax questions here. While you might get the right answer, you need to know what you're doing with your money.

Ask an accountant these types of questions. And find out his source of info, because even they can get it wrong. And at the end of the day, it's your ass on the line if an audit comes your way.

All very good advice. Yes you can claim your payments to him and a 1099 would probably be a perfect way to do it. The liability on screwing up payroll taxes though is pretty high so paying a professional to set it up for you just to make sure you have everything done correctly is a very good idea. It should be a one time fee and is tax deductible itself so well worth doing.

Kyle787 · Sep 21, 2011

volund said:
All very good advice. Yes you can claim your payments to him and a 1099 would probably be a perfect way to do it. The liability on screwing up payroll taxes though is pretty high so paying a professional to set it up for you just to make sure you have everything done correctly is a very good idea. It should be a one time fee and is tax deductible itself so well worth doing.

True, but I am still a full time student so I am not making THAT much money. I instead prefer to just call the state with my tax questions and maybe ask my parents a stray question or two if need be.

BassTrackerBoats · Sep 21, 2011

Kyle787 said:
True, but I am still a full time student so I am not making THAT much money. I instead prefer to just call the state with my tax questions and maybe ask my parents a stray question or two if need be.

Honestly, Kyle, it is much better business practices to hire a professional to set you up even though you do not make a bunch of cash.

Any new business enterprise should lay the ground work in a manner that is rock solid and relying on a non professional when it comes to taxes can cause some pretty rough issues.

Also, the last people I would call is the state/federal government as they do not have your best interests in mind; their best interests are collecting that paycheck every other Friday.

Can I write this off as a business expense?

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