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Hi. I am going to be hiring someone to help me put together trades and paying him a percentage of the profits. The trades will be placed in my account and name out of my house and taxes will be payed by me. My question is can I pay him cash or do I have to set up the paperwork as an employer and have him pay income taxes? The payouts could possibly be in the tens of thousands a year or more. It depends how much we make. This is nothing big like a hedge fund or prop trading firm. What are the laws regarding the situation we will be in and what are the penalties if I pay him cash? Thanks for any help.
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Criminal Defense Attorney serving Toms River, NJ
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Edward J. Dimon
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this person is either an employee [w-2] or an independent contractor [1099]. you must report the income/payment to the government in both situations. ed dimon, esq.
Answered on Jun 19th, 2014 at 5:26 PM