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I’m a web designer looking to hire an independent developer services (hourly). Tax-wise do I just 1099 him or?

I am getting overloaded with web work and need to offload some of the development to an individual/contractor. I am 1099′d (I believe) for the work I do with clients – would I need to have him do some sort of tax form and how would I find out which taxes I need to take out?

See if you treat the developer as an employee or as an independent contractor. An independent contractor gets 1099-misc and you do not need to withhold taxes.

An employee gets W2 and an independent contractor gets 1099-misc. On W2 the employer must withhold Social Security and Medicare taxes. //np On 1099-misc, you will pay 15.3% SE tax instead of 7.65% withheld from W2 income. Thus you pay about 7.5% more. The advantage of getting 1099-misc is that you can directly deduct your business related expenses on schedule C or C-EZ. On W2, you can take business related expenses only as itemized deduction

This entry was posted on Wednesday, March 10th, 2010 at 6:20 pm and is filed under web development services. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Responses to “I’m a web designer looking to hire an independent developer services (hourly). Tax-wise do I just 1099 him or?”

  1. v b Says:
    March 10th, 2010 at 11:26 pm

    If the work is done in the US, they person you pay is either an employee or a contractor. For both, you verify if they can work. Give the employee a W-4; W-9 to the contractor. Do NOT pay unless form is returned showing SSN. At end of year, give W-2 or 1099-misc.
    References :

  2. Jss Says:
    March 10th, 2010 at 11:56 pm

    See if you treat the developer as an employee or as an independent contractor. An independent contractor gets 1099-misc and you do not need to withhold taxes.

    An employee gets W2 and an independent contractor gets 1099-misc. On W2 the employer must withhold Social Security and Medicare taxes. //np On 1099-misc, you will pay 15.3% SE tax instead of 7.65% withheld from W2 income. Thus you pay about 7.5% more. The advantage of getting 1099-misc is that you can directly deduct your business related expenses on schedule C or C-EZ. On W2, you can take business related expenses only as itemized deduction
    References :
    http://taxipay.blogspot.com/2008/03/w2-or-1099-employee-or-independent.html

  3. Josh Says:
    March 11th, 2010 at 12:30 am

    I think the best thing to do would be to consider them an independent contractor. Then you would want to give them a 1099-MISC for any work they do for your company or business. However, I think you only have to give them a 1099-MISC if they earn more than $600 for the year from working for you.

    Hope this helps,

    -Josh, CPA
    References :
    http://www.irs.gov/pub/irs-pdf/f1099msc.pdf

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