Bringing on new employees is an awesome point in any business owner’s life.
It means your business is growing and you’re financially ready to expand internally.
Often times, when businesses are looking to bring on a new employee (or multiple employees), they have many questions about what needs to be done next.
Not only do you rely on your new employees to perform their duties, but they also depend on you as a means of income.
Making sure you have taken the appropriate steps to allow for a smooth and easy onboarding experience is a crucial step to starting your growth off on the right foot.
Generally, there are 2 types of workers: Employees or Independent Contractors.
It is very important that you do not misclassify the types of worker.
Employees receive a W-2 at the year-end to report their taxable income while Independent Contractors receive a 1099 form, and are responsible for their own employment taxes.
For reporting, as an employer/ business owner, it is important to make sure that your workers have completed either W-4 or W-9 tax form depending on the worker type.
In order to determine the worker type, there is an online assessment available on the Missouri State website or contact a local accounting firm for help.
There are certain conditions that must be met before an employee can be determined to be a legitimate 1099 Independent Contractor according to both IRS and State law.