USA Proper way to record cash payments

[Sayluv]

Hi.

I have a new business and I am in the service industry. I get referrals from various people. I pay a percentage for each referral and my one of my of referrers would like cash only. I would prefer to pay with check to him but whatever I guess. Do I just record these as a normally would move on? I could only assume that he may not want to pay taxes if he is required to do so but I can't control what he does on his end. I pay all the taxes I am required to on my end.

Thanks.

 

[AGH the CPA]

You can pay them in tin biscuits if you like but you will still need to record the payments and send them a 1099 if the $ exceeds $600.

 

[Sayluv]

Thanks AGH. I'm gonna have to just tell him this stuff and if he doesnt like it tough. If I give cash do I need some type of signed receipt? I would prefer a check so I have a trail. Happy 4th!

 

[AGH the CPA]

I would for sure get a signed receipt.

 

[John Kenneally]

Second the 1099, unless they file as a corporation themselves and you are paying that entity.