It depends. You are allowed to give a gift to a relative whenever you want. The 2023 gift tax limit was $17,000. For married couples, the limit was $17,000 each, for a total of $34,000. This means each spouse can give a gift to one person, it's called gift splitting. Below these amounts a gift tax return is not required.
On the other hand if you are a business and choose to pay your relative for the services performed on your land this could be considered as self employment income since they independently work by their own choice.
- What is a 1099-NEC?
- A business that makes payments for nonemployee compensation payment totaling $600 or more to a nonemployee typically needs to file Form 1099-NEC. Also, any business that withholds federal income tax from nonemployee compensation, regardless of the amount of payment, should file a 1099-NEC.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
