topic Can my husband who is a mechanic deduct the cost of his helper as a job-related expense? in Deductions & credits

Can my husband who is a mechanic deduct the cost of his helper as a job-related expense?

aloconnor12 — Wed, 05 Jun 2019 22:31:13 GMT

My husband is a mechanic. As part of his job he has been given a helper. One of the conditions for having this helper is that he must pay 50% of the helper's hourly rate. This expense is deducted directly from his paycheck. Is this expense deductible?

Your spouse is a W-2 employee? And not an independent con...

Opus 17 — Wed, 05 Jun 2019 22:31:15 GMT

Your spouse is a W-2 employee? And not an independent contractor?

And assuming he is a W-2 employee, will his W-2 at the en...

Opus 17 — Wed, 05 Jun 2019 22:31:16 GMT

And assuming he is a W-2 employee, will his W-2 at the end of the year reflect his gross earnings before or after the deduction? In other words, if his salary is (for example) $60,000 per year, and he is paying $5000 for the helper, will his W-2 show income of $60,000 or $55,000?

Yes, he is a W2 employee. On his pay stub it would say re...

aloconnor12 — Wed, 05 Jun 2019 22:31:17 GMT

Yes, he is a W2 employee. On his pay stub it would say regular pay $2,000.00 helper deduction $500.00 total pay $1,500.00.

your husband should find a new employer. You can tell him...

fanfare — Wed, 05 Jun 2019 22:31:19 GMT

your husband should find a new employer. You can tell him I said that.

It would be better if the employer reduced his salary and...

Opus 17 — Wed, 05 Jun 2019 22:31:20 GMT

It would be better if the employer reduced his salary and paid him $1500 flat. Or if the W-2 would have the $1500 figure. That way the income would be reduced, resulting in lower tax. No deduction, but you aren't taxed on income you never get.

As is, if the W-2 shows the effect of $2000 gross, then the expense is an unreimbursed work expense which is an itemized deduction subject to the 2% rule. You will get some deduction depending on his income and other itemized deductions but at best it will be partial only.

Really not a good way to do this.

Check the withholding on the pay stub. Is he paying socia...

Hal_Al — Wed, 05 Jun 2019 22:31:21 GMT

Check the withholding on the pay stub. Is he paying social security and medicare tax on $2000 or only $1500? If only $1500; then the deduction has already been taken for tax purposes. If not, he should talk to them about changing that

Social Security is 6.2% of the gross taxable income. If y...

Opus 17 — Wed, 05 Jun 2019 22:31:23 GMT

Social Security is 6.2% of the gross taxable income. If you divide the amount of Social Security tax by 6.2%, the result will be the wages that he is paying tax on.

The simple answer to your question is: Yes, he can deduct...

Hal_Al — Wed, 05 Jun 2019 22:31:24 GMT

The simple answer to your question is: Yes, he can deduct that. That's clearly a job or business expense. That answer assumes that his W-2 (or 1099-Misc) does not already show a reduced net pay (meaning the expense has already been deducted)

How he goes about deducting it depends on whether he is a regular W-2 employee or a contract (1099-Misc) employee

How would you deduct if 1099-Misc?

kcouture0903 — Wed, 05 Jun 2019 22:31:25 GMT

How would you deduct if 1099-Misc?

If you are paid on a 1099-Misc, the deduction is easier b...

Hal_Al — Wed, 05 Jun 2019 22:31:27 GMT

If you are paid on a 1099-Misc, the deduction is easier because you are not an employee. You are an independent contractor. As such, your helper is either your employee or a sub contractor. Your deduct it as wages (line 28 of schedule C) or contract labor (line 11 of Schedule C). If you paid your helper more than $600, you must issue him a 1099-Misc.

Re: If you are paid on a 1099-Misc, the deduction is easier b...

Bill_ — Sat, 20 Mar 2021 20:23:25 GMT

I am a 1099 independent Contractor. I am using a helper. I do not have a DBA or officially a structured business. Can I as a 1099. 1099 my helper?