As a sole proprietor, what are the rules for paying family members as independent contractors?

[bob-keffer]

Where do I record that expense?

[Vanessa]

If the family member meets the definition of an independent contractor you would pay them and report their income on a 1099 just like you would for a non-family member. 

1. Federal Taxes
2. Scroll down Click Show More next to Self-Employment
3. Click Start next to Income and Expenses
4. As you enter all of your business info you will come to a " Here's your ____ info" screen
5. Scroll down and click Add expenses for this work
6. Scroll down and click on the arrow next to Less Common Expenses
7. Click on Contract Labor then scroll down and click Continue
8. Enter the description and amount of your contract labor expenses.
9. You can also click on the link to prepare a 1099 if you haven't already issued them.