Self Employed Hiring an Employee

Log in / Sign Up

List of Forums + New Post Recipe Box Usergroups Following My Posts Bookmarks

Private Messages Advanced Search Rules New User Guide FAQ Advertise Contact Us

Forum -> Working Women

View latest: 24h 48h 72h

amother

Burgundy

Mon, May 18 2015, 11:43 am

If I am self-employed and want to hire a worker (as an independent contractor- I think that's the correct term), what do I have to do in order to legally set this up? Do I have to pay extra taxes or does the worker have to pay her own? In general, is it hard to set up?

mha3484

Mon, May 18 2015, 12:00 pm

I was offered an arrangement like this and turned it down because I did not want to take a 1099 but I think as long as you discuss it up front and the employee is okay with it, its not an issue. You should speak to an accountant/lawyer.

debsey

Mon, May 18 2015, 12:11 pm

This is one of those situations where what you don't know WILL hurt you. Hire a business lawyer or accountant (it should be a relatively quick, therefore not so expensive, consult) and set it all up legally.

chatz

Mon, May 18 2015, 12:51 pm

As far as I know, to hire an independent contractor, all you need is a W-9 from them. You pay them the full amount, no taxes withheld. At the end of the year, you give them (and the IRS) a 1099-MISC, reporting that payment made. The contractor is responsible for all taxes. The amount you pay them is a business expense.

If the person is a regular employee, you are responsible for a host of taxes and obligations. The IRS guidelines defining a independent contractor vs an employee is here: http://www.irs.gov/Businesses/.....loyee

The person you are hiring should understand clearly that you are not withholding taxes and that it is their responsibility. Sort out any confusion before you hire them.

wifenmother

Mon, May 18 2015, 12:53 pm

debsey wrote:

Well said! And I agree with Chatz on all points, except that I'd still suggest you consult with your accountant prior to making any move.

amother

Burgundy

Mon, May 18 2015, 12:57 pm

Thank you everyone!

Yes, I plan on consulting my accountant. Chatz, thank you very much for giving me details. I'm sure my accountant can fill me in on details, but I figured I would ask here and see if anyone knew just so that I could get the general picture.

SRS

Mon, May 18 2015, 5:27 pm

The book keeping aspect is easy. You write checks, do not withhold taxes, and issue a 1099 once a year. Determining that you are actually hiring a subcontractor is more complicated and two other considerations are ensuring and monitoring that your contractor is properly ensured and filling in your insurance if that might not be the case. Also, depending on the nature of the work involved, you might need to hold workers comp policy that covers a contractor.

Page 1 of 1