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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16559
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have a Delaware corporation and am currently the only employee.

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I have a Delaware corporation and am currently the only employee. My corporation is in the business of software development. My question pertains to how I should pay myself. Do I have the choice of being an employee (W2) or being a contractor (1099)? What are the benefits of each? If an employee, what additional paperwork is required? If a contractor, would I just 1099 myself at the end of the year? Any help, pointers and links to related materials are appreciated.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

If you are working for the corporation, you have no choice but to be a W-2 employee

Megan C :

You are an employee, not a contractor

Megan C :

You will have to file form W-2 each year for yourself, and form 940 and 941 for your business

Megan C :

If you are not up to date on payroll laws and regulations, I would suggest hiring a local accountant to help you with this. For one employee they should be super cheap.

Customer:

Thanks. So 940 and 941 are federal forms? I assume I'll have to pay the standard payroll taxes as well?

Megan C :

Yes, you will pay the payroll taxes, that's where the 940 and 941 come in to play

Megan C :

That's the returns that you pay the payroll taxes with

Customer:

Ok, thanks. I should definitely look to hire a local accountant as you recommend.

Megan C :

It should be reasonable

Megan C :

Maybe a couple hundred bucks a quarter

Customer:

Ok, great, thanks, Megan. Can you recommend a method to locate a local accountant?

Customer:

Is there a website or 1-800-accountant or the such?

Megan C :

You can go to your local state board of accountancy website and do a search

Megan C :

or just word of mouth

Customer:

Cool. Ok, I'll likely hit the local state board then. Thanks, again.

Megan C and other Tax Specialists are ready to help you
Thanks, Jeff for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.