Hiring People And Taxes

If I hire a writer for a site, am I responsible to give them a W2 or whatever, or can I just pay them and let them take care of all of the tax stuff?

 

You only need to pay them. The income tax onus is on the person earning the income unless you are a company.

 

Do it under contract terms, mean you dont need to do anything tax wise.

 

To answer your question you need to post what country you are in. Here in the states you would probably be best to hire the writer as a private contractor. If you pay the person more than $600 in any calendar year, you need to issue that person a 1099. This is going to be much easier than paying them as an employee.

 

Thanks for the info, I also didn't know this.

 

I'd definitely force them in to being a private contractor, but make sure it doesn't turn in to a full time job or the IRS will penalize you.

Private contractors are people who perform projects for a set period of time, and don't commit full time. If your asking them to perform for longer hours or trying to have them continuing to work, it can get nasty - so watch out, especially in California.

By the way, I've seen a lot of freelance guys (design and writers) turn themselves in to LLCs, really good idea and companies love to work with people who are LLCs and not individuals.

 

You need to 1099 them. You also need to make sure that you are not dictating too many of the conditions of how/where they work or else it could be considered that you are their employer instead of their client. Factors that are considered include working hours, location, and so on.

 

I suggest you would hire a writer from outside US... I you need quality and cost effective writings, let me know..

We just started our local SEO company and we are accepting offer from both local and abroad.

 

I'm a CPA. For what it's worth, the comments above about independent contractors versus employees are really in sync both with the IRS and with the state revenue agencies that I tend to deal with on behalf of clients who have this issue.

Also, the comment about LLCs is interesting... a one-owner (or single member) llc is disregarded as a entity separate and apart from its owner. So a one-person LLC doing writing (or consulting) looks for US tax purposes like a sole proprietorship. That LLC still needs to receive a 1099... and it reports its income on Schedule C.