If you hire people to work in your business are they your employees or contract labor?

If you are paying them money for work they do independent of your office, then you MUST issue them a Form 1099 Misc for the amount you paid them in a calendar year over $599. They are then responsible for their own social security taxes, medicare tax, and income taxes.

If they actually work in your office, you might have an employee. If you have the right to control or direct not only what is to be done but also how it is to be done, then your workers are most likely employees. If you can you direct or control only the result of the work done, and not the means and the methods of accomplishing the result, then your workers are probably independent contractors.

If they are independent contractors you should have them sign a contract. We have a simple contract labor form list under the forms button at www.sscservices.com. Feel free to download and use this form.

 
This information is provided in an effort to help you gather and organize the information necessary to file your individual or small business income tax return. While these financial tools are not a substitute for financial advice from a qualified professional, they can be used as a starting point in your decision making process.