AM I HIRING AN EMPLOYEE OR INDEPENDENT CONTRACTOR?
In a nutshell, if you determine when or how much the person works, control the payment they receive, offer benefits, or if there is no end to the service they provide, you've probably got yourself an employee. There is, however, a few factors that need to be carefully considered when making your determination. Visit the IRS website by clicking the link below to learn more.
INDEPENDENT CONTRACTOR: FORM W-9
You're required to have a W-9 on file to report payments to any individual or business that will receive $600 or more for their services (via FORM-1099 by Jan 31 of the following year). Typically, it's not required for larger companies that are S-Corps or Inc.'s, but I recommend completing one if they provide professional services (accountant, attorney, etc.). W-9's are also required when reporting interest, dividends & royalties.
NEW HIRE REQUIREMENTS
A new employee is required to fill out form W-4 and I-9 at the time they are hired. Your new employee must have a valid SSN. To validate the number given or to apply for a number, visit the Social Security Administration (link below). In addition to the federal forms, most states require that you report any new hires (for child support purposes) within 20 days of employment. Click below for an interactive map with individual state requirements.
*NOTE: You'll want to update your W-4's each year for good practice.
FORM W-4 | FORM I-9 | SSN SUPPORT | STATE-BY-STATE REPORTING
RESOURCES