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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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I manage 40 units where I must like on sight. Can I sign a

Resolved Question:

I manage 40 units where I must like on sight. Can I sign a contract for free rent and small salary and get a 1099 at end of year?
Submitted: 6 years ago.
Category: Tax
Expert:  Lev replied 6 years ago.

Your wages may not be less than a minimum wages set for your state.

Effective January 1, 2008, the minimum wage in California is $8 per hour. - http://www.dir.ca.gov/dlse/faq_minimumwage.htm

While your employer can exclude the value of lodging from your wages if it meets certain tests - http://www.justanswer.com/questions/3nz03-in-calif-the-industrial-welfare-commisions-order-11050-limits

However - your compensation may not be less than the minimum wage.

If you a full time employee - your weekly compensation should be at least $8 * 40 = $320

 

Let me know if you need any help.

 

Lev and other Tax Specialists are ready to help you
Customer: replied 6 years ago.

I am still confused is why I keep asking what seems like the same question. So excuse me. Of my 1150 then I assume I can exclude the 750 for rental of my unit and pay taxes on the rest. I will call our CPA tomorrow. Thanks

 

Laura

Expert:  Lev replied 6 years ago.

Hi Laura,

your situation is affected by two separate law sections - the labor law and the tax law.

-- According to the tax law - all compensation you receive is generally your taxable income - that include fringe benefits such as a lodging provided by your employer.

-- However under some circumstances the value of lodging provided by your employer is not included into compensation because it is considered a business expense - not compensation for services.

-- According to the labor law - your employer is required to pay at least a minimum hourly rate - and that may not be a subject of negotiation between you and your employer. All compensation above the minimum wages may be negotiated, but if your employer would pay less than $8 per hour in California - your employer may be prosecuted.

-- If you are an employee - you may have a free dwelling (assuming all requirements are met) and a small salary at least $8 per hour.

 

Let me know if you need any help.

 

Lev and other Tax Specialists are ready to help you