I'd like to hire an employee and i'll be paying him by personal check. I don't know how to go about the whole tax situation.
How will i know how much taxes to deduct from his paycheck*bi-weekly *? is there a site that i can go to?
where do i get the tax forms from?
Live in NYC...any help is greatly appreciated!
2007-09-24 18:53:19 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
am i liable for any taxes that need to be paid?
2007-09-24 18:53:52 · update #1
You can't hire him as an independent contractor like a couple people said unless the work he is doing for you meets the IRS criteria for that - you don't just get to decide, it depends on his job duties and your control of them.
You'd probably be ahead to either hire an accountant or a payroll service or buy payroll software - taxes are pretty complex with an employee. There are taxes you have to withhold, and taxes that you have to pay - these must be remitted to the feds, state and city on a specified schedule.
For federal, you can get info in Publication 15, download at irs.gov
2007-09-24 20:02:33 · answer #1 · answered by Judy 7 · 2⤊ 1⤋
Not only does he have to pay taxes... but YOU have to pay taxes on him too! (you both pay money off of each paycheck) You can get into a lot of trouble if you do not follow the law on this so be careful. As suggested you can hire him as an independant contractor- although there are strict laws regarding this situation as well. For example you can never tell him the hours that he is working! He gets to choose his own schedule.
Your best bet is to make sure your business is legal, get a business account and an accountant. That is the best way to make sure uncle sam does not come after you, and shut you down .
2007-09-25 02:03:35 · answer #2 · answered by think about that~ 4 · 0⤊ 2⤋
I'll add to Judy's excellent advice by recommending that you do NOT pay your employees with a personal check. It's never a good idea to co-mingle your personal and business funds even if you are a Sole Proprietor. Set up a separate business account and get business checks for it. When you eventually get audited (not if, but when!) you'll be glad you kept personal funds separate from business funds.
2007-09-25 06:13:07 · answer #3 · answered by Bostonian In MO 7 · 2⤊ 0⤋
Just tell him that you will be hiring him as a contractor and then you will issue a 1099 at the end of the year. That way you don't have to pull out any taxes - he will have to set aside 20% or whatever his tax bracket it - but inform him that he will have to do this at the end of the year.
Yes, you will also have to pay some sort of tax - I would talk to an accountant for this or search you county/state information via the website for where you live.
2007-09-25 01:57:49 · answer #4 · answered by totalstressor 4 · 0⤊ 3⤋
Yes, you are liable for paying the taxes if you hired this person as an employee. If you don't want to pay the taxes, hire the person as a contractor.
http://www.irs.gov/businesses/index.html
2007-09-25 01:59:24 · answer #5 · answered by equal_opposites 5 · 0⤊ 2⤋
Just get a good accountant. Why do you think the rich have expensive accountants? Becasue they like to pay? No, because the more you pay your accountant the more money you will make. please remember this rule all your life and you will thank me in the future. save on other things not an accountant. There are so many things to know, don't waste your time trying to learn them all yourself. GL!
2007-09-25 02:00:22 · answer #6 · answered by Anonymous · 0⤊ 1⤋
If you hire him as an independent contractor, all you need to is give him a 1099 at the end of the year.
Here's how to determine federal tax:
http://www.payroll.ucla.edu/charts/txinsfed.htm
Google your state to find the state deductions.
2007-09-25 01:58:08 · answer #7 · answered by Anonymous · 0⤊ 3⤋