Sadie operates her own industrial cleaning business. She occasionally hires her neighbor Glen, who operates a waste disposal business, to work with her. Sadie is unsure how to report the money she pays to Glen. Sadie paid Glen $3,500 during the year. What should Sadie do?
O Sadie can pay him "under the table" so that he does not have to claim it as income.
O Sadie is required to file a Form 1099-NEC, Nonemployee Compensation, for the services performed by Glen.
O Sadie must submit a Form W-2 to Glen and pay employment taxes.
O Sadie will only need to claim the payment as an expense on her Schedule C (Form 1040).