/biz/ - Business & Finance

[Anonymous No.1520777]

starting my first side-hustle business. simple window washing, gonna hire a guy off craigslist who owns a truck and basically just give him a list of addresses to go to to wash windows. ill do the sales and marketing myself in my off hours from my day job.

my question is, how do i legitimize his paycheck? not looking for trouble with the IRS

[Anonymous No.1520792]

You don't. Dumbass. There's a reason it's a side hustle. Pay him a fair wage and call it a day.

[Anonymous No.1520814]

>>1520777
there's 2 distinct options.

first is hire him as an employee. you'll need to get liability insurance for yourself and workman's comp insurance for him. See your insurance agent for advice. Then get on the IRS website and find the forms for withholding and depositing taxes for yourself and your employee. The amount is large, you pay as much taxes on his income as he does. From there you just follow the IRS instructions and make tax payments and deposits on time.

the second method is to hire him as a subcontractor. Get a workman's comp waiver signed by him and if possible get both of you liability insurance. He handles his own taxes, you report how much you paid him via a 1099 form each year. He's free to also find clients on his own and work for other people including your competitors. He is technically your competitor as well, you're just hiring him.

In general you'll make far more money hiring him as an employee, for example you might charge your clients equal to $125/hour while paying him $12/hour with about $30/hour going directly to his taxes and insurance. So you've got perhaps $83/hour to pay your costs and salary, most of which will go to taxes because of the self-employment tax.

however people that have their own truck and equipment know that their time is worth $125/hour so you may have trouble talking him into working for less. But if you work him as a subcontractor your cut will be much smaller. Perhaps you'll pay him $100/hour and you'll make $25/hour off his work, most of which will still go to taxes. So in that case you need to find a lot more work to break even, which means a lot more subcontractors. Which is fine.

that's what I usually do, work my crew as subcontractors making $100/hour. But I also do millions of dollars a year in sales just to make maybe $100k myself. Most of which goes to taxes because the self-employment tax roughly doubles my tax rate.

[Anonymous No.1520815]

>>1520814
would you suggest that i pay him under the table? this is just gonna be lining my pockets with a lil extra money

[Anonymous No.1520822]

>>1520815
not at all.

most of your valuable clients will be businesses. They write off the cost of window cleaning, meaning they WILL report your income to the IRS.

which means you wind up paying all the taxes on the money he makes instead of half of it (employee) or none of it (subcontractor).

You and he may both be willing to work for cash under the table, but your clients won't pay you that way.

[Anonymous No.1520823]

>>1520822
what if i told you someone was gonna run a Lucchese scheme on small locally and immigrant owned business and that would be 100% of their clientele

[Anonymous No.1520825]

>>1520814
>$125/hour
For window washing? Better be a good salesman!

>>1520815
Do you even know the first thing about window washing? You should do it for a day first yourself. Pretty dangerous job when you factor in high windows and ladders. I've done that and side jobs tree trimming, I don't really trust some Billybob and his truck off no craigslist myself.

[Anonymous No.1520826]

>>1520823
I would say that someone should worry more about the FBI than the IRS.

[Anonymous No.1520829]

>>1520826
>arab and chink immigrants contacting the FBI
yeaaaaah

[Anonymous No.1520830]

>>1520825
>Better be a good salesman!
I own a window washing company in Colorado.
that's the going average here, but you don't know it because we don't charge by the hour we charge by the job.

our average is pretty close to the national average. If I charge you $80 to clean your windows you can bet my 2 people will be done in less than 15 minutes.

If I charge you $125 that tells you I expect it will take 2 people half an hour to finish.

rates vary depending on location and amount of competition of course, my rates are just the average.

[Anonymous No.1520831]

>>1520829
it only takes one.

and of course they can report you anonymously.

[Anonymous No.1520835]

>>1520831
yes but if the place had no surveillance how would he even get caught? as far as he's concerned he has 100% plausible deniability and its simply an unfortunate case of irony

[Anonymous No.1520838]

>>1520835
>how would he even get caught?
someone would have to wear a wire.
either an existing victim or more likely someone the FBI sent in to set "him" up.

it doesn't matter, anyone too stupid to see how this will go down is going to prison anyways. If the victims don't murder him first.

[Anonymous No.1520841]

>>1520838
the way i see it, the act of intimidation he'd commit would only have to be committed once per place of business until they agreed to sign a contract, and its not like the fbi could predict his next target and warn them.

[Anonymous No.1520844]

>>1520841
threats are only good if you can follow through on them. And he's one dude just waiting to get shot.

he'd need help, and once you start getting other people helping you it gets easier for the FBI to turn one of your associates or sneak one of their own in.

Most likely he'd just wind up dead though. That's how these things play out. Unless you have an entire crime family backing you you're gonna have a bad time.

[Anonymous No.1520845]

>>1520844
a brick through a few windows in the dead of the night gets nobody shot.

[Anonymous No.1520873]

>>1520777
this business sounds like a flash in the pan.. whats stopping the window washer from stealing your contacts and business