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How Much can I Pay Family Members?

How much can I pay a family member before I have to file a 1099 and they have to claim it on their taxes?

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The IRS makes a distinction between employees and independent contractors--people get paid by a business but are not regular employees of a company. It is up to the business, however, to determine whether an employee falls under the category of independent contractor or employee. Independent contractors receive a form similar to the W-2, called a 1099-MISC. You only provide a 1099 if the contractor earned more than $600 or $10 in royalties.

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