Quote Originally Posted by erosproductions View Post
We were planning on paying all of our models in cash. Hiring them more or less as independent contractors. My question is, is this legal, or should we be paying by check, and taking out for state and federal taxes? Sorry, accounting I am totally stupid about...
Assuming that you are based in the US.
We use Quickbooks for all of our accounting needs which even includes our model payments.

We do give the models cash. What we do is withdraw the amount needed from the bank. We do not input this pull amount into our Quickbooks. When the model fills out their model application, there is an additional form which is very short explaining how they are paid and attached to it is a W-9 Misc form. The model fills it out.
Regardless of any amount, it is entered into quickbooks as a cash pay. Legally, if a model is paid $600.00 or more in a tax year, you are required to issue them a 1099 form no later than January 31st the following year.

Once a model does reach this, Quickbooks will then allow you to submit the proper 1099 form. It even does it for you. You mail it to the model. They are required to do their own taxes.

We also hold a reserve. We will pay the models, however we will hold their money and treat it as a W-2 procuring short-term employment basically.

This is legal.

My suggestion to you is for you to 1099 them as an independent contractor in the event they are paid over the amount of $600.00 in a tax year. Cash is okay, however have them sign some form of tax receipt. IF YOU REPORT their income and you do not have a W-9 on them, then you are in trouble.