I am a sole proprietor. I pay cash to laborers in different states. I keep a receipt book and have them sign after paying them. Can I write this off on my taxes?
Yes. That is Contract Labor. But You need to give a 1099Misc to anyone you paid $600 or more to for the year. But not to corporations or for merchandise. You send the IRS a copy of the 1099Misc with the transmittal summary form 1096. These are due to the person by Jan 31 and to the IRS by Jan 31.