I'm an indep contractor and I just brought on a sub. indep. contr. that I pay directly from the earnings that the company I'm contracted with pays me. 1st question: do I need to have him fill out a 1099 and 1096? 2nd question: When I file my Schedule C willI be able to deduct the wages I paid him from my gross earnings so that I'm not taxed on wages I paid him? I'm new at this so any info or help regarding these questions is GREATLY appreciated.
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Subs
The first question should be is this person truly a sub or is he an employee.
If you pay him as a sub (and in that case you should have him fill out a W-9 and you should issue him a 1099-Misc and send a 1096 to the Feds) and the IRS or your state Labor Department later determines he was an employee then you have back unpaid taxes and interest and penalties.JG
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