Hiring an assistant to help with a W-2 job

[katie]

My client called me wondering about the tax benefits, if any, of hiring an assistant for his W-2 job.

I want to preface this by stating that my client is a Sales Rep/Account Executive for a Medical Equipment Sales company. He receives a W-2 from his employer and does not have his own business. 

My client's job requires a lot of travel. My client recently had twins, so he is looking for a way to keep his job without traveling so much now that he has a family.

He spoke with his employer about needing an assistant but his employer won't hire anyone to assist him. The position itself not only requires a lot of travel but a lot of follow-up and scheduling.

He asked me if he can hire an independent contractor to help him with some of the admin stuff and travel. He would pay them a percentage of the commission he earns from his W-2 job. His commission is included in his W-2. He would be paying this assistant out of pocket since his employer refuses to hire someone. 

Are there any tax benefits to doing this? 

Thanks in advance!

[IRonMaN]

"Are there any tax benefits to doing this?"

None, at least for the federal since there is no way for a W-2 employee to deduct those expenses.

[PATAX]

Maybe I am missing something, but how can he hire an independent contractor when you yourself said he does not have his own business? Is he going (and able to?) to give him or her a 1099 NEC?

[katie]

Correct, he does not have his own business. He asked if he could itemize deductions as a W-2 employee. The itemized deductions would include the contractor payments and he would issue a 1099-NEC. Since he does not have an EIN nor DBA he would use his personal name and SSN on the PAYER section of Form 1099-NEC.

He asked if that didn't work, if he should apply for an EIN and file a Schedule C with only the contractor payments, no income would be on the Schedule C only Contractor expenses. 

Personally, my gut tells me this is not possible. Figured I would ask the community. 

[PATAX]

Here is something else to consider: If your client is considered an employee for that job, then why wouldn't his assistant also be considered an employee for doing the same work? Keep this in mind if there is an IRS audit or state audit and they determine that individual is an employee. Then who would he be an employee of? Your client or your client's employer, and who would pay any back employee taxes? I'm just asking.

[IRonMaN]

Your gut is right.

[BobKamman]

If he qualifies as an outside salesperson he can file Schedule C and claim deductions there.  

[qbteachmt]

You know if your taxpayer is a Statutory Employee:

https://www.investopedia.com/terms/s/statutory-employee.asp

If a regular W2 employee, then there is nothing in the tax code that provides for what you are asking. Sometimes life is not a tax deduction.

"he position itself not only requires a lot of travel but a lot of follow-up and scheduling."

I just had a client discuss with me how they hired a virtual assistant in the Philippines through an agency. The person is treated as an independent contractor and they are paying a high rate = $7 an hour.

"Since he does not have an EIN nor DBA he would use his personal name and SSN on the PAYER section of Form 1099-NEC."

Really? He wants to provide his SSN to all these people?

Why isn't he hiring Household Help? And who stated that the household help has to dust or change diapers all day. Hey, maybe the phone also rings a lot while they are "helping" around the home office.