Re: Subcontractors and billing

Subject: Re: Subcontractors and billing
From: "Gene Kim-Eng" <techwr -at- genek -dot- com>
To: <techwr-l -at- lists -dot- techwr-l -dot- com>
Date: Fri, 6 Mar 2009 07:44:05 -0800

Everything depends on what your client is willing to agree to. Ideally, I'd
prefer to convince my client to take on my subs as additional contractors
billing directly to them at their own rates (by lining up people who will do
portions of the project at lower rates than my own, thus reducing the number of
hours I bill to my client at my higher rate). If this can't be arranged, I'll
try to work out arrangements with my subs to charge me for specific and
individual deliverables (for example, for an illustrator, deliver one figure and
charge me for it), rather than on an hourly or professional services basis, so
that I can record and deduct the expenses for these on the same basis as my
office supplies.

Either of the above methods saves me from the need to submit 1099-MISC forms to
the IRS, provide 1099s to the subs at the end of the year and maintain
year-to-year records (except for my own business deductions, of course)

If you engage people on an hourly or professional services basis and pay them
more than $600 over the course of a year, you must submit 1099-MISC for each to
the IRS, provide them with summary 1099s for the year's payments to them and
maintain records in the event you or they are audited. See the instructions on
the IRS website at http://www.irs.gov/pub/irs-pdf/i1099msc.pdf.

When doing contract work, my priority in engaging others to help me is to make
my life a bit easier, not to begin building a mini-empire as a contract agency.

Gene Kim-Eng


----- Original Message -----
From: "Jeff Jansen" <jeff2 -dot- 0 -at- modestsystems -dot- com>
> I am a freelance self-employed tech writer. I'm considering hiring a
> subcontractor (more junior than I) to work on a project, but I've never
> hired a subcontractor before. I'm wondering how those of you who have done
> this handle the hourly billing arrangement with both the sub and the client.
> Let's say I bill the client for my time at $75/hr. If I pay my sub $50/hr,
> would you bill that time to the client at $50, and then directly bill your
> time reviewing the work and managing the sub at $75? Or would you bill all
> the sub's time at $75, and then let your review and management time come out
> of the $25/hr difference, without billing your actual hours doing that
> particular work? Does anyone use any other scenario that works for them?

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References:
Subcontractors and billing: From: Jeff Jansen

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