Hey everybody, it's Jay Burnham, and this is the real Jay Burnham. So, welcome to another exciting episode of the real Draper. Today, I want to discuss something that came up – the difference between employing workers and contractor workers, as well as the pros and cons. So, what is best? Well, that is the question you're going to have to answer for yourself. But for me, I prefer subcontracting workers. I put my guys on a 1099, pay them once a week, and give them a schedule for when they're supposed to be here. But you have to be careful with the 1099 because if they're solely employed by you and don't have other sources of income, the IRS may consider them employees, and you'll have to pay their taxes. So, when using the 1099, make sure you're being safe and smart about it. Hire guys who have other work and income to avoid them being classified as official employees. Now let's talk about the pros and cons of hiring a regular employee on a 9-to-5 hourly basis. One advantage is that you have someone who is employed, comes in according to the schedule, and gets the job done. However, the cons include taking full responsibility for them, including the hiring and firing process, as well as any damages or issues that may arise. All the burden falls on you, and your only option may be to fire them or involve the authorities, if necessary. Additionally, you will need insurance, workers' compensation, social security, and other benefits for them. Therefore, it's important to consider these factors and ensure that you are financially stable enough to afford putting people on your payroll. Typically, if you're making half a million dollars or more per year, you may have the means to do...
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1099 subcontractor requirements Form: What You Should Know
Independent Contractor and pay any excess wages within a period of 6 months after the close of the tax year as follows: Independent Contractor — Internal Revenue Service Sep 30, 2023 — What tax forms are needed for an independent contractor to be hired? · 1. IRS Tax Form 1099-NEC · 2. IRS Tax form 1099-MISC · 3. IRS Tax form 1096. Independent Contractor Reporting — EDD — CA.gov You are required to file a federal Nonemployee Compensation (Form 1099-NEC) or a Miscellaneous Information (Form 1099-MISC) for the services performed by the Independent Contractor and pay any excess wages within a period of 6 months after the close of the tax year as follows: Independent Contractor — IRS Reporting — CIR You must file a tax return for every month for which you do not receive a W-2, 1099 or Form W-4 if a payer is withholding taxable income as an exemption from your tax obligations. All your tax return information, including information required in the “Form W-2,” 1099 or W-4. Independent Contractor Reporting — EDD — CIR You are required to file a federal Nonemployee Compensation (Form 1099-NEC) or a Miscellaneous Information (Form 1099-MISC) for the services performed by the individual and pay any excess wages within a period of 6 months after the close of the tax year as follows: Independent Contractor Reporting — EDD — Internal Revenue Service In general, if your independent contractor is not filing his own tax returns, we will report you to a third party who does. Reporting, Payee Identification, and Record keeping Reporting, Payee Identification, and Record keeping — CIR — US.gov When using a third party payment processor such as payee.com, it is very important that you receive a copy of your customer's Form W-9 each month to ensure that all payment information that you want to use is accurate. Reporting, Payee Identification, and Record keeping — EDD — Internal Revenue Service If you use a payment processing service that only provides one form of tax identification (Form 1099 for wages, or 1098 for social security), you should be comfortable with only using that one form of identification on your monthly records.
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