Why can’t you have a stall cleaner be an independent contractor? You pay them, paying the taxes is their problem. People do it with housekeepers. Dog walkers, all sorts of things
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Oh there are plenty here waiting to pounce. You’ve gotten it on other threads, you know all about it. You’re smart to be circumspect here .
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You can but there are specifics around how many hours they work, how their schedule is dictated, what equipment they use, etc.
If a stall cleaner is required to come in at set hours everyday or even 5 days a week, then that would probably be an employee versus someone who can set their own schedule, brings their own equipment, and works in a similar capacity at other facilities.
As a business owner, you should be filing a 1099 for them, but you are correct, they are required to pay their own taxes. I do not believe an individual who is not running a business would need to file a 1099, so if you just had your own horses at home and had someone working for you in this manner, I’m not sure how the taxes work. (Caveat I’m not an attorney or a CPA)
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Many horse industry workers paid as independent contractors aren’t being classified correctly, IMO. You can’t just pick which you want.
It’s a huge hornet nest waiting to get kicked. As DS says above, most barn workers fail the IC tests and it’s going to be a big problem if the IRS ever gets around to enforcing it.
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Not to be too much of a stickler for details, but Usha Vance is not an immigrant - she was born in California to immigrant parents.
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Be careful there.
There are restrictions on just who qualifies as an “idependent contractor”.
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This.
But… my guess is it is low on their (the IRS) list of priorities to go after.
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If you are their sole source of income, if you control their work hours and how they do the work, then doing this is not legal.
You’ll get away with it until your worker shows up injured in an ER and unable to pay the bill, or until someone reports you to the state labor board or the IRS.
Note that even if they have individual health insurance, their health insurance company can come after you without their consent and will try to do so using any angle they can if it is an expensive accident.
If one of those things happens, it will be extremely uncomfortable and best case scenario you will be having several expensive conversations with your attorney.
There are some ways to set it up (ex: the clients are paying the help directly) that may or may not be workable. In any case, get help from an attorney beforehand to make sure you’re okay.
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Yup. But do we think the IRS will ever “get around to” or know to enforce it if we (the industry as a whole) keep paying people (lots of them undocumented) under the table? How will they know these workers exist if they are just paid cash with no employee or IC designation?
This is a big concern with respect to a lot of issues involving equine sports, which are risky. It’s my understanding that having employees or people riding on your property sign waivers doesn’t always protect property owners from this specific sort of litigation. There’s still risk.
No, you still have to. True for barn help as well as a nanny or other caregiver.
You don’t have to if you’re employing a firm or you are one of many customers for someone.
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Very much so. I’ve been deposed in such a case, where the insurance company sued without the cooperation of the injured party. Fortunately for the barn owner it was the injured person handling their own horse and there was no property-related angle. Important to have solid insurance of your own because anyone can sue for anything.
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That link (or other links on that page) doesn’t specify what an individual’s filling obligation is for an IC - can you share a specific source?
I personally am aware of multiple instances of the IRS or state labor board bringing the pain. Most of the time it was due to an injury but a disgruntled employee or customer holds a lot of leverage.
In one case I know of a boarding stable that nearly closed because of it, and probably that incident did contribute to the sale to a non-horse entity a few years later.
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Sounds like a bummer for everyone involved. Hope the complaining party got what they were looking for.
Well, a severely broken leg in one instance. Not really any good choices in the moment, but we all know that’s a thing that can happen. No one wanted any part of that outcome.
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My friend who works for the IRS (in a different department) would tell you otherwise. It’s a significant source of tax evasion and relatively easy for them to uncover (unless you are not deducting the expense at all). Not as much pushback as looking at deduction loopholes used by rich people with lots of lawyers. It used to be really easy to work or employ this way and most sectors are much much more cautious than they used to be.
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If you are paying cash and not deducting the expense of that labor, then no, they won’t know. But you’ll be paying taxes on that as income yourself.
So if it’s for a household/personal barn help, you can pass as long as no one gets injured and no one audits your cash flow. But if it’s a business, you might not find it’s financially advantageous to do that (aside from the liability) and of course if anyone notices you moving lots of cash out of your accounts, that now raises other flags that your bank is obligated to report. YMMV.
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That’s valuable insight. And worth sharing to this thread.
Penny saved, pound foolish, or so they say.
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This is specifically my question. If you(g) have only your own horses at home, and you have someone that passes the IC test (definitely not an employee) come a few days a week to clean stalls, aren’t you exempt from filing a 1099 for them? Why would an audit or injury mean you were in trouble with the IRS? (I understand that there are insurance risks here but I’m specifically asking about the taxes)
