I’m s/e sch C LLC. Hired my wife to market my company. Should I give her a 1099 or just deduct her fees on sch c? She will be filing her own sole prop sch c.

[duca1222]

Wife is not an employee of my company.

[Bsch4477 · Accepted solution]

As an independent contractor she gets a 1099-NEC and reports that income on her Sch C and you deduct it on your Sch C. 

[Opus 17]

If she is an employee, you must pay wages, have withholding of federal and state income tax, social security and medicare tax, and issue a W-2.  The wages and employer half of social security and medicare tax are deductible business expenses. 

If she is an independent contractor/subcontractor, you must issue a 1099-NEC if you pay more than $600.  You deduct the payment as a business expense, and she files a separate schedule C in her own name to report her business income, deduct any ordinary and necessary expenses she might have that are different from yours, and pay income tax and SE tax on the net profit from her business.  

[Mike9241]

if your wife does marketing for other businesses, this would be a positive in her claiming IC status

The IRS has form ss-8 for use in determining employee vs independent contractor status. You may want to use it for your own purposes or file it with the IRS so you have a definitive resolution. No one factor is determinative. 

https://www.irs.gov/forms-pubs/about-form-ss-8