F. A. Q.

F. A. Q.

Independent contractor or employee?

Turns out, it depends who you ask! There are at least four agencies that are concerned with the employee vs contractor question: IRS, your State Taxing Authority, the State Unemployment Agency, and the Department of Labor. Each one of them has a different set of guidelines that they use to determine how to classify those who help you operate your business. To find a break-down of the criteria, click here .

I've hired a new employee - now what?

  1. Have them fill out a W4 and an I-9
  2. Determine the payment method you would like to use (check or direct deposit)
  3. Determine the payment frequency you would like to use (monthly, semi-monthly, bi-weekly, or weekly)
  4. Determine their pay rate

Can I employ someone who lives in a different state than my business location?

The short answer? Yes! In the connected work environment that we live in today, it is not uncommon to be able to find your perfect employee half way across the US rather than around the block. What happens if your employee works in a different state than your business is in? Do you file returns in both states? Which state do you withhold taxes for? How do you send in those taxes? What if your dream employee moves away but you still want to employ them? It can seem complicated and overwhelming, but you can rely on our experts to help you decode the compliance law!

How much do I get reimbursed for mileage?

Beginning on Jan 1, 2018, the standard mileage rates for the use of a car is:
• 54.5 cents for every mile of business travel driven
• 18 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

What is a W-4 and how do I fill one out?

The W-4 tax form is used by employers to ensure they withhold the proper amount of federal income tax from a paycheck. The IRS recommends employees submit a new W-4 tax form each year, or any time their personal or financial situation changes. Filing out basic personal information like your name, address, and marital status are the easy part. The hard part is deciding the number of allowances you want to claim — which determines how much of your paycheck is set aside for taxes. The more allowances you claim, the less money will be taken out of your paycheck to go toward taxes.
The number of allowances will be determined by what happened with last year’s taxes. Here’s the general strategy: If you got a huge tax bill in April and don’t want another, reduce the number of allowances you claim. Doing this will increase the amount of taxes taken out each paycheck and will reduce your bill the following April. If you got a huge refund last year and would rather not have that money withheld throughout the year, do the opposite and reduce your allowances. Click here for more details about the W-4 tax form.

What is a 1099-Misc and who needs it?

A 1099 tax form is an information return that is submitted to the IRS when you pay an independent entity or contractor to do work for you business. If you pay them more than $600 in the year, you are required to file form 1099 and form 1096. These forms are due by January 31st of the following year. You should have any contractors fill out a form W-9 prior to engaging them to work for you. This will ensure that you have all the necessary information when it is time to file, and it will also help you determine if one is even necessary. If the contractor who is doing the work is a corporation, then you are not required to issue a 1099. You are not required to issue you a 1099-Misc in order to deduct payments to independent contractors. You are required to file the correct paperwork required by the W-9.

How do I read my W-2?

A W-2 contains information about your compensation. For a guide on understanding and decoding your W-2, click here.