Questions

Running a sports camp for my company and partnering with two individuals. Can I simply cut them a check, or do they need to fill out a 1099?

2answers

Consult a tax accountant; I am not an accountant or an attorney and this is not "professional advice."

I do have to ask a question about the wording here. Are these partners as in shareholders of the business, or are they working for it? That will make a difference in how you go about paying them.

If you are telling them what to do and when to do it, they are employees and you cannot 1099 them. 1099 means you say "here's what I need done", but when they do it and how they do it is up to them. So if you require them to be on site from 9-5 for example, they're employees.

If they are owners alongside you, that's different.

However you pay them must follow the matching principle of accounting. Their revenue from the camp has to match how they're involved. If they're part owners, they get a dividend check and they must report that as corporate income. If they're working for the camp, my guess is that they are employees and you must go through the hassle of reporting and paying them as such.


Answered 3 years ago

Check your local laws. In the US as a base standard if you pay an individual over $600 in a year, you must provide them a 1099 (k?) form and have their w9 on file legally.


Answered 10 months ago

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