As part of my job I regularly hire installers to put in the equipment that my company sells. I have been using a friend of mine to do the work and he has offered several times to pay me a "finders fee" from the money he gets for these jobs because without me he never would have gotten the work. I have always refused for moral reasons. If I were to open my own business account, take the entire fee for the install, say $20k, then subcontract him to do the work and pay him $18k would I be responsible for taxes on the whole $20k or just the $2k that I kept?
1 Answer from Attorneys
A business entity deducts its legitimate business expenses from gross income, and sends a 1099 to the installer. Reading between the lines, you want to set up a bank account to misappropriate company funds by self-dealing. You probably would have tax problems, but they would not last long. Most companies would fire you on the spot when they found out and, depending on your position in the company, sue you for breach of fiduciary duty.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
