Tax reporting – not at all Merry, but very Necessary!
It is a sign of success that a designer has more work than they can do for themselves. If you reached that level of success in 2014 – Congratulations! However, your success came with responsibilities to include tax reporting, and Fosterfashion will ring out 2014 by offering this quick reminder.
If you employed anyone in 2014, W-2 statements must be provided to your employees by January 31, 2015. If you are new to the role of “employer,” W-2 statements document income earned by employees, in the form of wages, tips and commissions earned in 2014, as well the as total amounts of state, federal and FICA taxes withheld by the employer.
If you paid an independent contractor $600 or more in 2014, they need to receive a 1099 form from you by January 31, 2015. A 1099 form states the amount you paid to your independent contractor. Where there is no “withholding,” it is the responsibility of the worker to report this income and pay appropriate taxes.
If you have questions about properly accounting for and reporting worker income, please contact my partner Karl Butterer, email@example.com.
If you have questions about classifying someone who is already working for you, as either an employee or independent contractor, please: 1) take a look at the employer “cheat sheet” created by Foster Swift, that identifies many of the issues that are relevant to classifying a worker as either an employee or an independent contractor; and 2) email me, firstname.lastname@example.org
If you anticipate needing someone to work for you in 2015, or you wonder if your independent contractors are really employees, beware that misclassification is a common and costly mistake and check in with us in January to see my post on employee classification.