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.
I've hired a new employee - now what?
- Have them fill out a W4 and an I-9
Determine the payment method you would like to use (check or direct deposit)
Determine the payment frequency you would like to use (monthly, semi-monthly, bi-weekly, or weekly)
Determine their pay rate
Can I employ someone who lives in a different state than my business location?
The short answer? Yes!
How much do I get reimbursed for mileage?
• 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.
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.
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.
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.