I’ve got a unique situation I am not sure how to handle. I have a retired gentleman who recently started working for me part time. We’re talking a day a week or less. He strongly prefers to be paid in cash. I talked to my insurance and they told me he is covered as long as I claim him on the annual audit. Are there any issues with paying him this way? Anything special I need to do tax or accounting wise?
Assuming he works for less than someone who doesn’t have a pension, so that’s a benefit for you.
The benefit for him is getting paid in cash.
My understanding is that if you pay him cash you can’t write off the expense.It’s not technically legal, but taxing a senior citizen for his labor shouldn’t be legal either.
I think you could send him a 1099, then it’s up to him whether or not to file it or whatever it’s called. He almost certainly will never get audited unless he’s a high income earner or has irregularities, which I doubt he would.