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

[aloconnor12]

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?

[Opus 17]

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

[Opus 17]

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?

[aloconnor12]

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.

[fanfare]

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

[Opus 17]

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.

[Hal_Al]

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

[Opus 17]

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.

[Hal_Al]

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

[kcouture0903]

How would you deduct if 1099-Misc?

[Hal_Al]

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.

[Bill_]

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?