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Tax.appeal.168, Tax Accountant
Category: Tax
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Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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I have a sole proprietor business and I hired a guy this past

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I have a sole proprietor business and I hired a guy this past year to help me out with some jobs. I have to check to see how much I paid him. It was between $9000-$11,000 thru out the year for part time work. What form do I have to file to show this and who is responsible to pay the taxes on this?
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

Happy New Year!!

My question is whether you hired him as an independent contractor or an employee? If he is an independent contractor, the form that needs to filed is a form 1099-Misc. (See links below for form and instructions).

1 copy goes to the contractor
1 copy goes to the IRS
1 copy goes to the state if applicable (not all states have personal income tax)

The contractor will be responsible for the tax obligations on the income.

If he is considered an employee, the form would be a Form W2. The form distribution process is the same as with the Form 1099. See below for link to form and instructions,.

With a W2, you are required to withhold the mandatory federal, state, and FICA taxes. As an employer, there are also other taxes that you would be responsible for paying as well. let me know if you need further clarification regarding the tax responsibilities as an employer.

On a different note, as the IRS is cracking down on this matter, you do want to make sure that you are within the guidelines to consider him an independent contractor and not an employee if this is what he is. If you would like more information on determining whether he is truly considered a contractor or employee, do let me know.
Customer: replied 5 years ago.
He does this type of work along with many other types. I would like to hire him full-time and keep him if I can as an employee.. But he so far is pretty much an independent worker as in gun for hire.. I need to offer him more work and money to get him as a full blown employee. But he pretty much freelances. So what do I do?
Hello again,

The general rule is that an individual is an independent contractor IF the payer has the right to control or direct ONLY the result of the work and not what will be done and how it will be done.


If the above applies, the person is considered an independent contractor and you will complete the Form 1099.
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