Question

Where would I deduct expenses paid for employees I hired through a temp agency?

Forum|Forum|5 years ago
May 8, 2020
2 replies
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TurboTax Self Employed Online

What was your business relation to the workers? "Whose" employees were they? Was their employer the agency? Did you merely contract with the agency to provide you their contract labor, and the agency provided all the employment services, paid their wages, deducted their withholding, FICA, etc? Or were you the employer and had to pay all that?

D

dulan39Author

We are a plumbing business and used a staffing agency to hire our workers for the majority of the year. Basically we paid the agency a premium for their hourly wages.

M

mesquitebean

@ dulan39 wrote:
We are a plumbing business and used a staffing agency to hire our workers for the majority of the year. Basically we paid the agency a premium for their hourly wages.

I still don't understand "whose" employees they were; i.e., who is legally their employer, pays their wages, provides them their W-2, withholds their taxes, FICA, etc. Do you do all that? Was the "premium" you paid like a finder's fee or commission, but you are the actual employer of record that pays their wages, employment taxes, provides their W-2s, etc.? And are you asking how/where to report that "premium expense" that you paid to the agency that provided them? Or are the workers "contract labor" and the agency considered the employer?

I'm a fellow user and not a tax person, so I won't give any tax advice. You'll have to wait and see if any tax person will see this thread and assist you. Or we can tell you how to phone TurboTax Support.

In any case, there's something that needs to be clarified first that may help anyone who assists you here. You said "we are a plumbing business." What does the "we" mean? What kind of business entity; i.e, how is your business organized? Are you a self-employed business/sole proprietor, a single-member LLC, multi-member LLC, partnership, etc. Or is "we" a joint venture or LLC of husband and wife?

You appear to be using Self-Employed Edition which is for a self-employed business, independent contractors, and sole proprietors, and can be used by a single-member LLC in some situations. Multi-member LLC, partnerships, corporations, etc. require a different product.

Or is the "we" the 2 members of a married husband-wife and if so, is it in a community property state?

A

Anonymous

if your business is not an LLC, S Corp, Partnership, or C-corp and by we you mean you and your spouse

for non-community property states you report on two schedule C's spliiting the income and expenses between you and your spouse based on the relative time you each spent working for the business.

in a community property state everything is split 50/50

you paid a service agency so the expense can go on the line for contract labor

for a husband/wife LLC (becuase a LLC can't elect not to file) or partnership file form 1065

for S-corp form 1120-S

for C-corp form 1120