Hiring Staff

by Hugo Miller
(SC)

What kind of taxes or paper work is required if I am hiring people to help me producing goods which I sell using my LLC ? I plan to start hiring staff on a hourly base.

Thanks,

Hugo

Answer

A lot! :)

For all the talk about encouraging employment, the government does a lot to make hiring an employee an administrative nightmare.

First, your LLC needs an EIN. I'm going to assume you have one.

If not, get a Form SS-4 from the IRS, fill it out, and get your EIN.

Second, you're going to need a payroll service from a reputable company like Quicken Payroll or ADP.

They will take you from beginning to the end of the process, and help you with any state requirements (like state unemployment insurance, work comp., etc.)

Don't fool around trying to figure out payroll. It's too complicated, and if you make a mistake, you as the owner are PERSONALLY liable for underpayments, interest and penalties.

If this sounds like a lot of work, can you find a way to outsource your work to independent contractors?

That way, you'll only have to give them a 1099 at the end of the year, no withholdings, or FICA, FUTA, SUI, and the rest of the alphabet soup of taxes and charges levied on employers.