Would the Rover fee (deducted from sitters) be considered Employment Agency Fees?
Would the Rover fee be considered Employment Agency Fees for 2019?
2 Answers
I'm not a CPA, so you could check with one. However, I'd say no. Every sitter or walker on Rover is considered an Independent Contractor (with rover providing support for your small business). Also, it's best to simply start with the payments received (not the booking total), which already has their fee subtracted when rover pays you.
Very creative thinking. :-) However, those fees used to be deductible on Schedule B under Miscellaneous and related to job searches. With the last change in the tax laws, I am pretty sure they're gone, gone, gone.
As Deb wrote, we operate as Independent Contractors and there's no provision on Schedule C for a deduction like that. Besides, Rover's cut is more analogous to what a temp agency's cut would be than an employment agency. Different things.
Besides, it is never a good idea to "gross up" your income. Work with the net amount received from Rover.
Comments
Thanks for your answer. I didn't think so but this year on TurboTax, Employment Agency Fee was listed as an example of a deduction. Thought it was new tax change for 2019.
Need to reverse myself based on the Q&A on TurboTax here https://ttlc.intuit.com/community/taxes/discussion/can-i-deduct-my-talent-agency-fees/00/281095 and the link to the IRS. HOWEVER, you would need to gross up your income which is NEVER better than a deduction.
It is more advantagous to use the net amount paid by Rover than be able to deduct as a business expense.