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  • Form 1099 vs. W-2: Which Should You Use?

    posted by Michele Bossart
    Newest Article
  • Some localities use local income tax to fund schools.

    What Is Local Income Tax?

    posted by Mike Kappel
    Recent Article
  • Form 1099 vs. W-2: Which Should You Use?

    After the end of every year, you need to report your workers’ wages. You must send a form to the worker and governments. But, which form do you send? The form you use depends on if the worker was a contractor or an employee.  

    What Is Local Income Tax?

    Cities, counties, and other small areas across the U.S. impose a local income tax. Find out what your responsibilities are for withholding the tax from employee wages.

    What Is Form SS-4?

    Some businesses are required to have a Federal Employer Identification Number (FEIN). FEINs, or EINs, are used by employers and other businesses for tax filing and reporting purposes.

    FEINs work similarly to Social Security numbers. When you include your business’s unique nine-digit number on documents, the IRS can easily identify your company.

    One way to apply for this taxpayer identification number for your business is to file Form SS-4. What is Form SS-4?

    Do You Need to File Form 940? If So, Here’s How

    Did you employ workers at your small business this year? When you have employees, you need to handle employment taxes, like federal unemployment (FUTA) taxes.

    For each employee you have, you must pay a percentage of their wages for federal unemployment taxes, deposit the tax with the IRS, and report your tax liability on Form 940.

    So, what is Form 940, which employers have to file it, and how do you file it? Before diving into Form 940, brush up on your FUTA tax liability responsibilities.

    How to Convert a Worker from Contractor to Employee

    At some point, you might need to convert an independent contractor to an employee.

    You might have worked with a contractor several times, but now you want to hire them as an employee. For example, you might have used an independent contractor to periodically assist with your business’s marketing, but now you want to hire them as an employee who permanently works for you.

    Or, you might have misclassified an employee. You labeled a worker as a contractor when you should have labeled them as an employee. If this happens, you need to convert them immediately.

    Learn how to convert independent contractors to employees below.

    What You Need to Know About Mandatory Employer Registration

    Bringing on employees doesn’t make you an official employer. You need to sign up for accounts with the IRS and your state to legally become an employer. Otherwise, you will violate employment laws, which could lead to hefty penalties. Make sure you know your employer registration requirements before hiring employees.

    Use Our Ultimate Checklist to Hire Your First Employee

    Hiring your first employee is exhilarating. Instead of remaining buried by your business responsibilities, you can bring employees on board to alleviate some of your stress. But for many, the endless information about becoming an employer can be overwhelming.

    Every small business owner starts their employer journey by hiring their first employee. To get through the process, learn how to hire your first employee.

    How to Give a Payroll Advance

    Sometimes, an employee might hit a financial rough patch. Something unexpected might happen, such as a medical emergency, that requires more money than the employee has saved up.

    If this happens, the employee might ask you for a salary advance to help them make ends meet. Before you begin giving payroll advances, you need to know what you are required to do and make a payroll advance agreement.

    Can Employees Be Paid Quarterly?

    When you’re trying to decide how often to pay employees, you’ll realize there are several options. Common pay frequencies include weekly, biweekly, semi-monthly, and monthly. You might also consider the less common quarterly pay frequency.

    How to Do Tip Pooling Among Your Employees

    In many service industries, employees receive tips for their work. If your employees regularly receive tips, you could use a tip pooling agreement at your business.

    Form 1099 vs. W-2: Which Should You Use?

    After the end of every year, you need to report your workers’ wages. You must send a form to the worker and governments. But, which form do you send? The form you use depends on if the worker was a contractor or an employee.  

    What Is Local Income Tax?

    Cities, counties, and other small areas across the U.S. impose a local income tax. Find out what your responsibilities are for withholding the tax from employee wages.

    What Is Form SS-4?

    Some businesses are required to have a Federal Employer Identification Number (FEIN). FEINs, or EINs, are used by employers and other businesses for tax filing and reporting purposes.

    FEINs work similarly to Social Security numbers. When you include your business’s unique nine-digit number on documents, the IRS can easily identify your company.

    One way to apply for this taxpayer identification number for your business is to file Form SS-4. What is Form SS-4?

    Do You Need to File Form 940? If So, Here’s How

    Did you employ workers at your small business this year? When you have employees, you need to handle employment taxes, like federal unemployment (FUTA) taxes.

    For each employee you have, you must pay a percentage of their wages for federal unemployment taxes, deposit the tax with the IRS, and report your tax liability on Form 940.

    So, what is Form 940, which employers have to file it, and how do you file it? Before diving into Form 940, brush up on your FUTA tax liability responsibilities.

    How to Convert a Worker from Contractor to Employee

    At some point, you might need to convert an independent contractor to an employee.

    You might have worked with a contractor several times, but now you want to hire them as an employee. For example, you might have used an independent contractor to periodically assist with your business’s marketing, but now you want to hire them as an employee who permanently works for you.

    Or, you might have misclassified an employee. You labeled a worker as a contractor when you should have labeled them as an employee. If this happens, you need to convert them immediately.

    Learn how to convert independent contractors to employees below.

    What You Need to Know About Mandatory Employer Registration

    Bringing on employees doesn’t make you an official employer. You need to sign up for accounts with the IRS and your state to legally become an employer. Otherwise, you will violate employment laws, which could lead to hefty penalties. Make sure you know your employer registration requirements before hiring employees.

    Use Our Ultimate Checklist to Hire Your First Employee

    Hiring your first employee is exhilarating. Instead of remaining buried by your business responsibilities, you can bring employees on board to alleviate some of your stress. But for many, the endless information about becoming an employer can be overwhelming.

    Every small business owner starts their employer journey by hiring their first employee. To get through the process, learn how to hire your first employee.

    How to Give a Payroll Advance

    Sometimes, an employee might hit a financial rough patch. Something unexpected might happen, such as a medical emergency, that requires more money than the employee has saved up.

    If this happens, the employee might ask you for a salary advance to help them make ends meet. Before you begin giving payroll advances, you need to know what you are required to do and make a payroll advance agreement.

    Can Employees Be Paid Quarterly?

    When you’re trying to decide how often to pay employees, you’ll realize there are several options. Common pay frequencies include weekly, biweekly, semi-monthly, and monthly. You might also consider the less common quarterly pay frequency.

    How to Do Tip Pooling Among Your Employees

    In many service industries, employees receive tips for their work. If your employees regularly receive tips, you could use a tip pooling agreement at your business.

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