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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 02-24-2014, 06:38 PM
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Default Unconventional Way to Pay an Assistant?

I will keep this as short as possible, I am in need of an assistant, after multiple interviews I am not impressed.

I asked my younger sister if she was interested in the position, she is but doesn't want to be paid. She wants to be paid in food and housing?!

Our mother has been a messy house keeper. The last year she has always made excuses to come to my home and not hers, been brushing it off.

Now younger sister (24) is saying it is so bad she doesn't want to live there anymore. It's more like a hoarders house!!!! This is news to me!

My question is am I able to pay her in food and housing? How would I claim that? I don't want it to look like I am claiming 7 children by myself without assistance (illegal in my state)! Thank you for your time and advice!
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Old 02-24-2014, 07:26 PM
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Cradle2crayons Cradle2crayons is offline
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Quote:
Originally Posted by Unregistered View Post
I will keep this as short as possible, I am in need of an assistant, after multiple interviews I am not impressed.

I asked my younger sister if she was interested in the position, she is but doesn't want to be paid. She wants to be paid in food and housing?!

Our mother has been a messy house keeper. The last year she has always made excuses to come to my home and not hers, been brushing it off.

Now younger sister (24) is saying it is so bad she doesn't want to live there anymore. It's more like a hoarders house!!!! This is news to me!

My question is am I able to pay her in food and housing? How would I claim that? I don't want it to look like I am claiming 7 children by myself without assistance (illegal in my state)! Thank you for your time and advice!
I would give her x income and then "charge" her x amount in food and housing. It's the only way you can document x as outgoing and x as income.

Such as "sister, I agree to pay you $500 per month for working Monday through Friday from 800 am until 2:00 pm. You will pay me $500 per month for rent and groceries"
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Old 02-25-2014, 06:44 AM
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Heidi Heidi is offline
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Or, just have her be your volunteer helper.
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Old 02-25-2014, 07:51 AM
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I would think this would be similar to the rules for bartering.

http://www.tomcopelandblog.com/2011/...ou-barter.html

Also here is an article from Tom Copeland about hiring assistants the correct way

http://www.tomcopelandblog.com/2012/...right-way.html
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Old 02-25-2014, 10:59 AM
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Default Hiring sister

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Originally Posted by Cradle2crayons View Post
I would give her x income and then "charge" her x amount in food and housing. It's the only way you can document x as outgoing and x as income.

Such as "sister, I agree to pay you $500 per month for working Monday through Friday from 800 am until 2:00 pm. You will pay me $500 per month for rent and groceries"
The reason I wouldn't do this is because then the provider must do withholding taxes and probably need to purchase workers compensation insurance and report the $500 as income.
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Old 02-25-2014, 11:01 AM
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TomCopeland TomCopeland is offline
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Default Hiring sister

Quote:
Originally Posted by Unregistered View Post
I will keep this as short as possible, I am in need of an assistant, after multiple interviews I am not impressed.

I asked my younger sister if she was interested in the position, she is but doesn't want to be paid. She wants to be paid in food and housing?!

Our mother has been a messy house keeper. The last year she has always made excuses to come to my home and not hers, been brushing it off.

Now younger sister (24) is saying it is so bad she doesn't want to live there anymore. It's more like a hoarders house!!!! This is news to me!

My question is am I able to pay her in food and housing? How would I claim that? I don't want it to look like I am claiming 7 children by myself without assistance (illegal in my state)! Thank you for your time and advice!
The best way to handle this is as a personal, not business relationship. Your sister volunteers to work for you. You help your sister out by giving her some housing and food. You can't deduct what you give your sister and she doesn't have to report it as income. You don't have to do payroll taxes and treat your sister as an employee. You should, however, make sure your sister is licensed to care for children and that you are not required to purchase workers' compensation insurance (talk to your business liability insurance agent about this).
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