How to pay contractor, who to make check out to?

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Big friggin deal. The guy has a checking account in his name. It does not mean he is avoiding taxes at all. There are tens of thousands of small businesses that have a DBA and it is just simpler to have the check made to their name.
How do you "deal with a business"? Every business I've ever dealt with was comprised of individual people and that is who I dealt with. If you'd rather deal with an answering machine or a desk, that is up to you. It is the integrity of those people that make a business good or bad, not a piece of stationery with a logo.
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Edwin Pawlowski wrote:

Having a invoice w/ a business name and handwriting a request for a check made to an individual doesn't seem like high integrity to me.
But, that's me and how I run my own business...ymmv.
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Everyone seems to think this guy is trying to avoid taxes but it might just be that he registered his business name, or not, and doesn't have a corresponding bank account. It's not uncommon for someone to call there company something and then not have all of the bank accounts and stuff in a separate name. It would have been easier to call his company "John Smith Contracting" though.

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Careful. If he is trying to avoid sales taxes, some areas put the onus on the customer to ensure that they are paying the taxes and theoretically could come to you to prove you paid the tax, however unlikely.
At least you HAVE an invoice, and the invoice has a request for the check to be paid to his name, if anyone questions you, you can pull the invoice and prove that you paid it to the name requested on the invoice.
Most problems occur when there is no invoice and no paper trail showing the connection between the contractor and the person you paid. You can never prove you paid the bill.

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I'd love to see where this is written
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Unfortunately that love will go unrequited. The onus is always on the contractor to collect he tax.
In NY we have Certificates of Capital Improvements, which, when properly filled out and signed by both parties, absolves the contractor from having to collect tax. There are definite requirement about what constitutes a capital improvement, and does not require the payment of tax, and repairs, which do.
Note to the OP: Call your contractor and ask if you paid tax on that $800 of work. If not, please remit the tax you owe immediately.
R
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In NYS, you would also not owe sales tax if it is a service, not a product. If you buy roses for your yard, you pay sales tax on it. If you hire a landscaper to plant them, but not to provide any physical things, then it is a service and there is no sales tax. If you pay the landscaper to provide the flowers AND plant them, then you owe sales tax on both the flowers and the labor.
However, in either case if the "sale" is over some number (I think $600) and you are paying an individual, you need to issue a 1099.
Rico might know more about this than I do, but there might also be differences in insurance coverage for workers comp., disability, liability, etc. etc.
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Now how someone can pretend to know the law in all states and areas is beyone me. Here in NJ, if you buy a piece of furniture in NC, you are responsible for paying the tax, even though you bought it out of state. And yes, they have gone after people.

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On Jun 20, 8:32 pm, snipped-for-privacy@optonline.net wrote:

In NY, there's a line on your personal income tax return where you enter the amount of the tax on all of your out-of-state purchases. It's on the honor system for all items except autos. For those, you need to pay the sales tax to register the car. If you bought the car from an individual (or out of state), the County Clerk collects the tax when you register it.
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wite the check out to the company name ... don't say anything about it to him. if he brings up the issue, then he will have to either tell you why or try to BS his way around it. If he owns the company, there is no reason that he can't deposit the check. If he doesn't own the company, he should get his money from them, not you.

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Your contract was with the company, not the owner of the company. They are totally different entities.
Make the check out to the company. That way there can never be any argument as to your payment. All he has to do is to endorse the company check over to himself, or to "Cash", and cash it or deposit it in whatever bank a/c he likes.
No problem
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Walter
www.rationality.net
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How do you know there was a contract with the company?
You are making as assumption. The OP mentioned the INVOICE had a company name, not on a contract. It may have been a verbal agreement to that point.
Pay in cash, get a receipt.
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I guess you never heard of or refuse to acknowlegdge what a sole proprietorship is about.

Oh, please. Like after you pay the guy, with a check made out to him, he's going to come back and claim he was never paid? Get real!

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wrote:

Oh and all contractors are honorable, ethical and trustworthy. I write the check to the company I contracted with. If in the initial negotiation he asks me to pay him cash or make out a check to another entity or him personally, at that point I want ironclad receipts for payment for the job with the permit numbers or numbers written on the receipt. "In God We Trust"
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No one ever said all contractors are honest. But you think making the check out after the job is done to the individual who did the work or his company name is going to protect you somehow from the contractor? The job is done and was apparently completed to his satisfaction. You have the cancelled check as proof that payment was made.
If in the initial negotiation he asks me to pay him cash or make out a check to another entity

Oh, so you want a receipt before the job is even started. That makes a lot of sense. And if you have any issues or doubts about permits, that has zippo to do with how the check is made out and should be dealt with seperately. And again, your cancelled check is proof that payment was made. Plus you should get a signed receipt or the agreement marked paid when you hand over the check. Geez, this ain;t rocket science.

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wrote:

I have a cancelled check that says I paid someone something. If the name on that check does not match the name on the permit (the one who pulled the permit), there is no way I'm writing the check to another individual. Several years ago I had some work done by a 'reputable' contractor. He asked that I pay for the material up front, about $800. He also asked me to make the check out to his supplier so that he didn't have to run to the bank, deposit it and then write another check to his supplier. Foolish me I complied. When he completed the job he asked me for a check or cash 'in total'. I reminded him of the $800 check I wrote out to his supplier but he had a severe memory lapse and insisted that I either give him a receipt showing the payment to him or to pay up. I refused. He harassed me and threatened a lien but after a call from my attorney he backed off never to be heard of again. As I said in a previous message: "In God We Trust.
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Cutting a check directly to a supplier is a major red flag. I wouldn't do it without lots of verification, signed receipts from both contractor and vendor, and a long history with the contractor. Glad you didn't get hung up to dry on yours.
R
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Which proves my point. You had the cancelled check made out to the supplier. So, what's the big deal? You deducted the $800 from the final payment. No different than if the guy showed up at the end of the job and asked for an extra $800 on top of the contracted amount, which he could have done too. Or if you had paid him the $800 as a stage payment and he denied you did pay him. Who you made the check out to made zippo difference. You have the proof in black and white. In fact, I'd rather make it out to the supplier, because at least you know it's going to the supplier for materials, instead of the contractor using it for beer. Of course, you still don't know it's for your materials, but it's at least a little better.
And getting all wrapped up in what name is on the permit, IMO, has very little bearing on the payment. The issue is who did the work. You could have one construction permit that covers mutiple contractors, so that issue makes little sense.
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To me it boils down to this. I hire ABC Corp to do a job. ABC Corp pulls permits and does the work. I'm going to pay ABC Corp for the job they did. I don't care what the contractor does or wants to do with the payment. It's not my problem. I just want to know that somewhere down the line ABC Corp is not being sold to someone else who looks in their books and finds I never paid the corp. for work done and files a lien or that the contractor doesn't try and pull anything shady on me. I'm sure if I paid him with a check with someone else's name and address on it he wouldn't accept it.

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It was never stated that the contractor in the case under discussion was incorporated. Most small guys are not. As far as pulling something shady, he can do that regardless of how you paid him. It's just silly to think that he's gonna get anywhere saying you didn't pay him when you have the cancelled check made out to him. You really think he's going to go to court to try to claim that? Especially when many folks here think his purpose for the check in his name was to avoid taxes. BTW, I don't necessarily buy that either, because having a trail of checks that you endorsed and cashed is a pretty stupid way to try to avoid taxes. Not only is it easy to find, it's very hard to explain as an oversight, or innocent omission, like some questionable deduction would be. It's very obvious tax fraud

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