Tag Archives | 1099

Washington State Raises Minimum Wage for 2013

The minimum wage in the state of Washington will rise to $9.19 on Jan. 1, 2013. Employers can pay 14- and 15-year-olds a lower wage of $7.81 per hour, or 85 percent of the minimum wage. The new minimum wage is a 15-cent increase from the current rate of $9.04. Full-time workers earning minimum wage will […]

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What Is a 1099-MISC?

A 1099-MISC is an information return that the IRS requires for certain business transactions. The 1099-MISC shows miscellaneous income, such as payment to non-employees for services performed. For example, a business could issue a 1099-MISC to show payment to a subcontractor. The IRS website lists many other uses of the 1099-MISC, as well as the amounts that are reportable and […]

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Payroll Question of the Day: How Should I Pay Myself?

If you’re a small business owner, you may be the last person to get paid after all bills have gone out and you’ve met payroll for your employees. But depending on your business structure, you may also need to add yourself to your company payroll. It’s important to completely understand the structure of your business […]

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Employees and Independent Contractors: What’s the Difference?

Here’s a payroll question: How do you determine who is an employee? The IRS defines who is an employee or an independent contractor, and it all depends on the relationship between the employer and the individual. It’s important to classify them properly, but it can be tricky. Here’s an example: Joe Smith has committed to […]

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Payroll News: President Obama Repeals 1099 Reporting Rules

Good news for small business owners — President Obama has signed the repeal of the controversial new 1099 reporting requirements. The proposed reporting requirements were part of the Affordable Care Act, and would have required all businesses to issue 1099-MISC forms to vendors for all services as well as goods over $600. The repeal of […]

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Remember Payroll Tax Deadlines with Calendar Connector

Attention small business owners — the IRS has a new tool to help you remember not to forget to pay your taxes! If you have trouble recalling when to make your monthly payroll tax deposit, try the IRS Calendar Connector, a nifty little program you can download quickly from the IRS website. Calendar Connector will remind […]

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Misclassifying Independent Contractors – More Legislation Pending

It’s no secret that the IRS is cracking down on Independent Contractor misclassifications.   There are currently two pieces of legislation in Congress addressing this issue.  The Employee Misclassification Protection Act (H.R. 5107 and S. 3254), was introduced this past April.  This proposal would require employers to keep records of independent contractors who work for them, […]

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One Thing That Can Trigger an IRS Audit for Your Company

The Internal Revenue Service estimates it has lost $34.7 billion in unpaid taxes because contractors have been misclassified as 1099 independent contractors (IC) instead of W-2 employees.  In one year, the Government Accountability Office estimated that misclassification cost the federal government $4.7 billion in income taxes.  Understandably, the IRS has made it a priority to investigate […]

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How Can You Be Sure That You Are Correctly Classifying Workers?

The best way to be sure that you are correctly classifying your workers is to use IRS Form SS-8 “Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.”  If you have situations where a potential worker insists that he/she is an independent contractor, IRS Form SS-8 can be given to the potential […]

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Classify As A W2 Employee Or A 1099 Independent Contractor?

When a person is paid on the form W-2, the employer automatically withholds from the payroll and pays all of the necessary employee income taxes as required by the IRS.  These taxes include: Federal Income Tax, State Income Tax, and FICA (Social Security and Medicare).  In addition, the employer will pay all of the necessary […]

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