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Can I pay my brother to build my website? Does this have tax implications for him if one time 500$ job

TL;DR

Yes, you can pay your brother to build your website, and this expense is generally deductible as a business expense. However, your brother must report the $500 as income, which has tax implications for him.

Detailed Answer

The cost of paying someone to build a website for your business is typically deductible as an ordinary and necessary business expense under IRC §162. This applies whether the person is a family member or not. The expense is deductible in the year it is incurred, provided it is directly related to your business. However, your brother must report the $500 as income on his tax return, as it constitutes taxable income. If your brother is not in the business of building websites, he would report this on his Form 1040 as 'Other Income'. If he is in the business of providing such services, he should report it on Schedule C. It's important to treat this transaction as you would with any other vendor, including issuing a Form 1099-NEC if you pay him $600 or more during the year.

Where to Put It on the Tax Form

Schedule C, Line 8 (Advertising) or Line 27a (Other expenses), depending on how you categorize the expense.

Real World Example

A freelance graphic designer pays her brother $500 to build a professional website to showcase her portfolio and attract clients. She deducts this expense on her Schedule C under 'Advertising'. Her brother, who does not regularly build websites, reports the $500 as 'Other Income' on his Form 1040.

Audit Risk & Documentation Tips

Audit risk is moderate due to the family relationship. To substantiate the deduction, keep a written agreement or contract detailing the work performed, the payment amount, and the business purpose. Save any invoices and proof of payment, such as a canceled check or bank statement. If applicable, issue a Form 1099-NEC to your brother if total payments exceed $600 for the year.

IRS Reference

IRS Publication 535, Business Expenses; IRC §162.

Relevant Industries

FreelancersSmall Business OwnersConsultantsDigital Marketing

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on February 27, 2026

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