Recently got an offer accepted on a new property. It needs to be painted and some other small cleanup. Friend of mine accross the street lost a job and could use a few bucks, so I'm thinking about letting him do the painting so he can earn few bucks. Would like to claim the expense (around $250) but worried that he'll be considered my employee since he's entirely under my direction in this case... Hoping to avoid employee status if possible - what's the best way to do it?

Does he have a business license? Insurance with a d/b/a? Workers comp? Does he do the same type of work for others? Does he set his own hours? If not, he is not technically a subcontractor.

That said, you are taking the risk in the event of an injury. If the amount you pay him is over $600, you should be issuing a 1099 at the end of the year.

The only way to limit your liability would be to do one of these;

1 get your own insurance, etc & hire him as an employee

2. require him to be a fully insured legitimate sub

3. hire him thru a temp agency

Do not claim him as an employee. The process and paperwork involved in payroll is expensive. You are so much better off avoiding your friend and hire someone else.

You could also hire him thru an agency or another contractor with insurance.

Two hundred and fifty is a small enough number that I would not be overly concerned. You would simply make a notation and not have a valid receipt. No auditor would question a few hundred dollars at turnover.

If the friend does a poor job, you will need to hire someone else to go over the work. In both cases I would worry more about their being hurt than the receipts.

I bet, by the time you read this, half of the work will already be completed. That is how thousands of landlords operate every day.

-#1 Don't hire friends. "Joe, I'd rather be your friend than your boss". Each time I broke this rule I could kick myself. Money and deadlines change relationships. I cannot demand my friend get the job done or improve his quality.

When you find a non-friend to work:

-Independent Contractor agreement.

-pay to a business name: Joe Smith DBA Joe's Painting

-pay by check, NEVER NEVER NEVER cash.

-DO NOT let him use your ladder. Better to pay him more to buy or rent his own ladder. The owner of the ladder will be sued if there is a fall. A painter has tools, ladders - employees use the boss's ladder.

-have a written quote, with a deadline penalty, and pay that amount, only when complete.

What is he painting? Rooms? Just pay the guy for his time. Keep it simple. He should only be there a few days. Again, keep it simple. In my area friends help friends as we all have our specialties and basically barter our jobs. NEVER had a problem as long as you closely monitor the work and know who is working for you.

John

Two comments from posts so far...

BRAD_IN [IN] - He's so right! If you provide him any tools (ladder, screwdriver, etc) you are his employer. That's the law. May be a TX law or IRS law. Don't know, don't care.

Also, someone mentioned an independent subcontractor agreement. That's good, but there may also be a state form. In TX it's a Waiver of Workman's Comp form put out by the state. You have to fill it out before the job or early into it and fax it to the state.